Walmart to test free shipping, add Alipay in Chinese stores

Walmart (NYSE:WMT) is testing unlimited annual shipping even as it expands its partnership with Alibaba's (NYSE:BABA) Alipay to bring mobile payments to 25 Walmart stores in Shenzhen, China.

Walmart will begin offering unlimited three-day free shipping to select shoppers who pay a $50 annual fee, beginning this summer. The program is an as of yet unnamed test and will be offered on an invite-only basis to some customers. More than 1 million of Walmart's 7 million online items will be available.

The initiative seems directly aimed at taking on Amazon's Prime service, because while Prime's $99 annual fee includes more than guaranteed two-day shipping with its added perks such as streaming entertainment and an e-book lending library, many shoppers almost exclusively utilize the shipping component.

Studies show that in spite of the rapid proliferation of same-day or next-day delivery, speed is less important than price or reliability.

"One of the things that we've heard from customers is that they want shopping that's predicable and they want it to be affordable," Walmart spokesman Ravi Jariwala told TechCrunch. "[This test is] really to understand is this yet another new way that we can serve customers?"

Separately, shoppers in Shenzen can now make purchases using the Alipay Wallet app.

Walmart plans to eventually expand the mobile payment system to its more than 400 Walmart and Sam's Club stores across the country, reported CNet.

Alipay handles payments for Alibaba, similar to the way in which PayPal handles eBay transactions. Alibaba is ultimately in charge of the 300 million Alipay users.

The new partnership is a stepping stone for Walmart as it works to boost sales in China, and in recent months Alibaba has served as a bridge for U.S. retailers in the Chinese market, including brands such as Costco and Nike.

Alibaba recently made a big push for mobile. In the latest quarter, the company's revenue from mobile jumped 352 percent to $846 million.

The news comes just days after Walmart and Alibaba announced they would start selling more than 2 million products via messaging start-up Tango. In addition, Walmart recently opened an online store on Alibaba's Tmall.

Walmart is just one of several U.S. retailers looking to solidify itself in the Chinese e-commerce market through partnerships with Alipay. For example, online mall ShopRunner is working with Alipay to help more U.S. retailers gain access to China.

For more:
-See this CNet article
-See this TechCrunch story

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