Walmart to sell e-commerce biz to JD.com

SHANGHAI - Walmart Stores Inc plans to sell Yihaodian – its wholly-owned Chinese e-commerce business – to JD.com in exchange for a 5% equity stake in the online retailer. The move reflects Yihaodian’s weak sales and Walmart’s hopes that linking up with a strong domestic partner will improve its market position in China.

The Shanghai Daily said JD.com will issue Walmart about 145 million new shares, valued at about US$1.5 billion at the current share price. Doug McMillon, President and CEO of Walmart, said in a statement: “JD.com has a very complementary business and is an ideal partner who will help us reach significantly more customers.”

JD.com CEO, Richard Liu, said: “We believe this tie-up will increase both product selection and overall user experience, and we look forward to further developing Yihaodian, which has tremendous strength in important regions of eastern and southern China.”

JD’s market share of B2C online sales in China was about 25% by the end of Q1 2016, trailing Alibaba Tmall’s 56%. Yihaodian was far below in the rankings, with only 1.3%, according to Internet research firm iResearch. Both JD and Alibaba have partnered with overseas brands and retailers to increase the scope and quality of imported goods they sell. www.webershandwick.cn (ATI).