Walmart China has taken full ownership of its Chinese eCommerce joint venture Yihaodian.com, buying out the 49 per cent stake held by local owners.
In addition to seeking a higher profile in eCommerce, Walmart said it plans to create a “seamless experience” for customers across online, mobile and stores.
Three years ago Walmart China took control of Yihaodian by bumping up its stake to 51 per cent. While the company pales in size compared to local eCommerce rivals Alibaba and JD.com, the world’s biggest retailer has been building up its online business in the wake of mediocre sales in the US, in a direct challenge to online competitor, Amazon.
The investment will help Walmart target China’s fast-growing online market at a time when largely bricks and mortar retailers are feeling the pinch of competition from online rivals and a slowing of the world’s second-largest economy.
Wal-Mart’s Asia head, Scott Price, said earlier this year that online retail was important to help tap China’s younger generations and that the firm would increasingly look to weave together its online and offline presence in the market.
Walmart, France’s Carrefour and Britain’s Tesco have all seen sales or sales growth slip over the past five years in China, losing market share to local rivals.
Yihaodian will be headed by Wang Lu, president and CEO of Walmart Global eCommerce in Asia.
Walmart’s move also comes after China said last month it will allow full foreign ownership of some eCommerce businesses, with the goal of encouraging foreign investment and the development and competitiveness of the sector.
“Yihaodian has excelled as one of China’s top eCommerce businesses. We’re excited about the team at Yihaodian and their strong local e-commerce experience,” said Neil Ashe, president and CEO of Walmart Global eCommerce.
“This local experience, combined with Walmart’s global sourcing and our strong local retail presence and supply chain will allow us to deliver low prices on the products customers need in new and exciting ways,” he said.
“Our investment in Yihaodian is part of our long-term commitment to grow in China and we look forward to continuing to play a positive role in the development of the eCommerce industry,” said Ashe.
Walmart China acquired the remaining shares from Ping An of China, a financial services group, and the co-founders, former Chairman Gang Yu and former CEO Junling Liu.
