Walmart Forms Alliance With JD.com To Transform China Business

Walmart has formed a strategic alliance with JD.com, China’s largest e-commerce company by revenue, the companies have announced. The retailers said they have entered into the alliance to better serve consumers across China through a combination of e-commerce and retail.

For Walmart, the alliance expands opportunities in China e-commerce and provides its operations, including Sam’s Clubs, with potential traffic from JD.com’s online customer base as well as access to an extensive same-day delivery network. JD.com will leverage Walmart's Yihaodian brand and business in eastern and southern China, and in key product categories such as grocery and household goods, which complement JD.com's own geographical and product strengths. JD.com’s customers gain access to a wide range of new and imported items from Walmart and Sam’s Club.

Under the agreement, Walmart will receive 144,952,250 newly issued shares of JD.com Class A ordinary stock, amounting to approximately 5% of total shares outstanding. 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, leveraging its global supply chain to provide an array of products. JD.com and Walmart will together work to grow the Yihaodian brand and business under its current name and market position, the companies said.

Sam’s Club China will open a flagship store on JD.com, expanding the availability of Sam’s Club imported products across the country with the added attraction of same- and next-day delivery through JD.com’s nationwide warehousing and delivery network, which covers 600 million potential consumers, according to the companies.

JD.com’s O2O JV Dada, China’s largest crowd-sourced delivery platform, will list Walmart’s China stores as a preferred retailer, 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, the companies stated.

“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," 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.”