Walmart Ups Investment In Chinese E-commerce Site

Walmart says it has reached an agreement to increase its investment in the holding company of Yihaodian, an e-commerce website in China.  The move will bring Walmart’s ownership stake in Yihaodian to approximately 51%, upping its position from its original investment last May.

The transaction is subject to Chinese government regulatory approval. Terms of the new investment were not disclosed.

Yihaodian is a business-to-consumer web site that offers more than 180,000 products to Chinese customers. Launched in 2008, the company has about 5,400 employees and an extensive logistics network throughout China.

It offers products ranging from groceries to baby products, consumer electronics and apparel.  Its delivery model offers next-day delivery in most instances at competitive prices.

Walmart has been growing its retail presence in China for nearly 15 years. At last count, the Bentonville-based retail giant had more than 300 stores and 95,000 employees.

With its brick-and-mortar stores and online sales, Walmart has been growing its market penetration among Chinese shoppers. The country is the world’s most populous potential consumer market with more than 1.3 million citizens. The China Internet Network Information Center, the government-authorized body that maintains the country’s Internet infrastructure, reports China had 161 million online shoppers as of 2011.

Neil Ashe, President and CEO of Walmart Global eCommerce, said, “This investment further enables Walmart to deliver a superb customer experience to Chinese consumers that are already connected to the world through smart phones and social media. We are on track to create the next generation of eCommerce, offering the latest in online innovations to give our customers a unique shopping experience.”

“We are very impressed with Yihaodian’s strong management team, solid competence in supply chain management and, like Walmart, they are committed to outstanding service to their customers,” Ashe continued. “Our further investment in Yihaodian demonstrates that we are committed to investing in China in a key growth industry and developing all that goes with it:  logistics, infrastructure, innovative talent and new technologies that will help China meet its development goals.  In addition to contributing to China’s eCommerce goals, with our increased investment in Yihaodian, we are pleased to be able to further contribute to China’s domestic consumption, help stabilize prices, and advance expansion in the middle and western regions.”

Junling Liu, co-founder and CEO of Yihaodian, said, “More than an investment of funds, Walmart will share its knowledge and technology together with its best-in-class practices in retail and transfer them to Yihaodian’s existing organization, leveraging these synergies with our local market expertise to deliver enhanced product offerings, lower prices and a better shopping experience for our customers.”

You can view the Yihaodian web site at this link.