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Wal-Mart set to drop Yihaodian

Wal-Mart Stores Inc said today it plans to sell its Chinese e-commerce business Yihaodian in exchange for a 5 percent equity stake in JD.com.

Then JD.com, a major Chinese online shopping site, will take over the Shanghai-based online grocery Yihaodian.

JD.com will issue about 145 million new shares to Wal-Mart, worth about US$1.5 billion under the current share price, according to a joint statement.

Both JD and Walmart's shares were up in afternoon trading on New York Stock Exchange.

Walmart's membership-only store Sam's Club will open a flagship store on JD.com, and at the same time giving Walmart access to JD.Com's online traffic and expand its reach into the Chinese market.

President and CEO of Walmart Doug McMillon said that “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.”

“We believe that 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.com chief executive officer Richard Liu said in a joint statement.

Walmart has been struggling to take a piece of cake in the booming online retailing market in China after it took over a controlling stake in Yihaodian.com in 2012 and pledged to drive synergies between Yihaodian and its own logistics capabilities, but little has been achieved.

It bought the remaining 49 percent stake in Yihaodian last year when the business’s founders left and started a new venture.




 

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