Walmart plants flag with Chinese ecommerce site

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Walmart has unveiled plans to take a majority share in fast-growing Chinese ecommerce website Yihaodian.com, cementing its commitment both to ecommerce and international investment in the growing Chinese market.

Yihaodian.com promises next-day delivery of essential items to customers

Yihaodian was launched in 2008 and offers more than 180,000 SKUs in categories including grocery, mum and baby, electronics and clothing. Walmart first took a minority stake in Yihaodian in May last year, but plans to increase its shareholding to 51%.

Yihaodian serves a growing customer base with next-day delivery of essential items at competitive prices and has over 2,000 employees, three logistics centres and more than 10 million registered users. Yihaodian is building on a significant position within a growing market fuelled by an increase in m-commerce and a growing base of premium customers.

In the past three years, Walmart has quietly launched transactional sites to China, Mexico and Chile. The Chinese move comes two weeks after Walmart’s appointment of former Woolworths (Australia) executive Greg Foran as chief executive of its China operations.

The commitment to Yihaodian in China demonstrates Walmart’s positioning of ecommerce as a key strategic initiative, as it seeks to compete with pure-play retailers such as Amazon. Walmart’s main competition in China will come from local sites Taobao Mall and Newegg as well as Amazon, which is likely to step up its already rapidly growing operations.

Over the past year Amazon has invested to innovate and widen its product offering, which numbers more than 2.6 million SKUs and 8,000 food items including local delicacies.

Last year, Amazon opened a 1.3 million sq ft fulfilment centre in Kunshan, near Shanghai, in a bid to achieve faster delivery times and to position it for growth beyond China’s main cities.

With a majority stake in Yihaodian and the recent launch of a Chinese Sam’s Club website, Walmart is now positioned for accelerated ecommerce growth in China and a better understanding of its Chinese customers. Walmart Global, ecommerce, president and chief executive Neil Ashe, described China as a key growth area: “This investment further enables Walmart to deliver a superb customer experience to Chinese consumers who are already connected to the world through smart phones and social media.”