American retail giant Wal-Mart Stores has further increased its stake in China’s second-largest eCommerce firm JD.com.
It now has a 12.1 per cent shareholding, up from 10.8 per cent, and comes about three months after the Arkansas-based retailer disclosed it had almost doubled its holding in JD.com from 5.9 per cent.
Like Amazon, a large part of JD.com’s income comes from selling products it holds in its own inventory. Its logistics network has also helped it win more users through speedy shipping, says Deal Street Asia.
With about 400 physical stores in China, Wal-Mart struck a swap deal with JD.com last June, selling its fully owned Chinese eCommerce player Yihaodian to JD.com in return for a 5 per cent stake in JD.com, worth around $1.5 billion. This gave Wal-Mart access to JD.com’s nationwide logistics and warehousing networks, as well as its 150 million users.
Meanwhile, JD.com is better able to compete with Alibaba in the online grocery business, which is expected to grow to nearly $180 billion by 2020, according to data from food research body IGD.
In October, Wal-Mart invested $50 million in Chinese online grocery and delivery firm New Dada. This will help it gain more foothold by offering shoppers faster delivery times. At the time, New Dada had more than 25 million registered customers. It delivers in more than 300 cities.