Chinese online retailer JD.com to buy Yiaodian

JD Mall CEO Haoyu Shen with Walmart Global eCommerce president and CEO Neil Ashe.

BENTONVILLE, Ark. — Walmart intends to sell its Yihaodian e-commerce business in China to JD.com Inc., that country’s largest  e-commerce retailer by revenue. The deal is part of a strategic partnership between the two companies that meant to boost Walmart’s online sales and in-store traffic in China, while expanding JD.com’s e-commerce business.

As part of the agreement, Walmart will receive about 145 million newly issued Class A shares in JD.com, amounting to approximately 5% of total shares outstanding. The companies say their partnership will have multiple facets, including:

• 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, vastly expanding the availability of Sam’s Club’s high-quality imported products across China. It will offer 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, which should drive online traffic to Walmart stores and also allow customers to order fresh food and other items from Walmart stores for 2-hour home delivery.  Walmart will continue to operate its own physical stores.

“We’re excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China, as well as for our businesses. We thank the Yihaodian associates for creating a strong brand and business that has helped lead to this opportunity with JD.com,” Walmart president and CEO Doug McMillon said in a statement.  “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.”

JD.com CEO Richard Liu said he is confident the agreement “will help bring e-commerce in China to the next level,” benefiting millions of consumers in the process.

“Walmart is synonymous with trusted-quality efficient retailing, and we believe that this tie up will increase both product selection and overall user experience,” Liu said. “We look forward to further developing Yihaodian, which has tremendous strength in important regions of eastern and southern China. Yihaodian will continue offering the outstanding user experience its customers have come to expect, which we will further augment by leveraging our unparalleled logistics capabilities and breadth of product categories.

“We are also delighted to welcome the Sam’s Club flagship store onto the JD.com platform. Sam’s Club’s unique, high-end product selection meets the demand from China’s increasing affluent consumers for high-quality, imported products and has already proven popular in the Chinese cities where it has stores. JD.com’s reputation for authentic products and superior customer experience make it an outstanding home for these iconic businesses to reach hundreds of millions more customers in China.”