Walmart and JD.com Announce Strategic Alliance to Serve Consumers Across China
Walmart and JD.com, China’s largest e-commerce company by revenue, have formed a strategic alliance to serve consumers across China through a combination of ecommerce and retail.
The agreement includes a wide range of business initiatives, covering both online and offline retail. For Walmart, the alliance expands its opportunity in China ecommerce and provides its stores and Sam’s Clubs with potential traffic from JD.com’s base of online customers and same-day delivery network.
JD.com will leverage Yihaodian’s strong brand and business in eastern and southern China and in key product categories such as high-quality grocery and household goods, both of which complement its own geographical and product strengths. In addition, JD.com’s customers will gain access to a wide range of new and imported items from Walmart and Sam’s Club.
Yihaodian is an ecommerce website serving eastern and southern China which Walmart first invested in 2011 and of which it acquired 100-percent ownership in 2015.
As part of the agreement, Walmart will acquire five percent of the total shares outstanding in JD.com.
JD.com will take ownership of the Yihaodian marketplace platform assets, including the Yihaodian brand, website, and app. Walmart will continue to operate the Yihaodian direct sales business and will be a seller on the Yihaodian marketplace. JD.com and Walmart will work together on growing the Yihaodian brand and business under its current name and market position.
Sam’s Club China will open a flagship store on JD.com, offering same- and next-day delivery through JD.com’s nationwide warehousing and delivery network, which covers a population of 600 million consumers.
Walmart and JD.com will work together to leverage their supply chains to increase the product selection for customers across China, including broadening the range of imported products.
Walmart’s China stores will be listed as a preferred retailer on JD.com’s O2O JV Dada, China’s largest crowd-sourced delivery platform, driving online traffic to Walmart stores and allowing customers to order fresh food and other items from Walmart stores for two-hour home delivery, while significantly broadening the product selection available to Dada’s customers. Walmart will continue to operate its own physical stores.
“We thank the Yihaodian associates for creating a strong brand and business that has helped lead to this opportunity with JD.com,” said Doug McMillon, president and CEO of Walmart. “JD.com shares similar values in making the lives of customers better. It also has a very complementary business and is an ideal partner that will help us offer compelling new experiences that can reach significantly more customers. We also look forward to offering customers a tremendous number of quality imported products not previously widely available in China through Walmart and Sam’s Club.”
“We believe that this tie up will increase both product selection and overall user experience,” said Richard Liu, CEO of JD.com. “We look forward to further developing Yihaodian, which has tremendous strength in important regions of eastern and southern China.”