Walmart sells online operations in China

Walmart (NYSE:WMT) has formed a strategic alliance with JD.com that includes the sale of its online operations in China.

JD.com is the second largest e-commerce retailer in China after Alibaba, and the business will now own Walmart's Yihaodian marketplace assets, including the Yihaodian brand, website and app, according to an announcement.

The agreement includes a range of business initiatives that covers both online and offline retailer operations in China.

Walmart will continue to operate the Yihaodian direct sales business and will be a seller on the Yihaodian marketplace. The two companies will work together to build the brand, which will retain the Yihaodian name.

Sam's Club China will open on JD.com, expanding its reach. It will also begin offering same-day delivery through JD.com's warehouse and delivery network. The two companies will work together to leverage their supply chains and increase the range of products offered, including imported items.

Walmart's China stores will be listed as a preferred retailer on JD.com's O2O JV Dada, China's largest crowd-sourced delivery platform, driving online traffic to Walmart stores and allowing customers to order fresh food and other items from Walmart stores for two-hour home delivery, according to the company.

Walmart stores are not part of the deal and Walmart will continue to operate brick- and-mortar locations.

"[JD.com] has a very complementary business and is an ideal partner that will help us offer compelling new experiences that can reach significantly more customers," said Walmart President and CEO Doug McMillon. "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."

"Walmart is synonymous with trusted-quality efficient retailing, and we believe that this tie up will increase both product selection and overall user experience," said Richard Liu, CEO of JD.com. "We look forward to further developing Yihaodian, which has tremendous strength in important regions of eastern and southern China. Yihaodian will continue offering the outstanding user experience its customers have come to expect, which we will further augment by leveraging our unparalleled logistics capabilities and breadth of product categories."

Walmart has operated in China since 1996 and has 430 stores there today. But its Yihaodian online operations have had trouble gaining traction and command just a 1.5 percent market share, according to The Wall Street Journal.

Yihaodian was operated as a joint venture with a Chinese operator until Walmart took full control last year. Last week, the retailer shook up its executive teams in several international divisions.

For more:
- see this Walmart press release
- see this Wall Street Journal story (tiered subscription)

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