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The strategic partnership will cover both online and offline retail

Chinese e-commerce giant JD.com today announced that it has formed a strategic alliance with retail giant Walmart, in an effort to “better serve consumers across China through a powerful combination of e-commerce and retail.”

As part of the agreement, Walmart will receive 144,952,250 newly issued JD.com Class A ordinary shares, amounting to approximately five per cent of total shares outstanding.

“We are very happy to announce this landmark agreement between two leading retailers, which we are confident will help bring e-commerce in China to the next level and benefit millions of consumers,” said JD.com CEO Richard Liu in a statement.

“Walmart is synonymous with trusted-quality efficient retailing, and we believe that this tie up will increase both product selection and overall user experience. 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,” he further explained.

The agreement will cover both online and offline retail.

For Walmart, the alliance will provide its stores and Sam’s Clubs with potential traffic from JD.com’s significant base of online customers and vast same-day delivery network to serve its customers.

Apart from leveraging Yihaodian’s strong brand and business in eastern and southern China, JD.com will also leverage on its key product categories such as high-quality grocery and household goods.

JD.com customers will also gain access to a wide range of new and imported items from Walmart and Sam’s Club.

Also Read: E-commerce giant JD.com to begin using robots and drones

Haoyu Shen (CEO of JD Mall) and Neil Ashe (President and CEO of Walmart Global eCommerce) sign strategic alliance between their companies (Image Credit: Business Wire)

The strategic partnership also includes:

1. JD.com will take ownership of the Yihaodian marketplace platform assets (including the Yihaodian brand, website and app) while Walmart will continue to operate the Yihaodian direct sales business and will be a seller on the Yihaodian marketplace. Both JD.com and Walmart will work together on growing the Yihaodian brand and business under its current name and market position.

2. Sam’s Club China will open a flagship store on JD.com. It will offer same- and next-day delivery through JD.com’s nationwide warehousing and delivery network, covering a population of 600 million consumers.
Walmart and JD.com will work together to leverage their supply chains to increase product selection for customers across China, including broadening range of imported products.

3. Walmart’s China stores will be listed as a preferred retailer on JD.com’s O2O JV Dada (which is claimed to be China’s largest crowdsourced delivery platform). It will drive online traffic to Walmart stores and allowing customers to order fresh food and other items from Walmart stores for two-hour home delivery, while broadening the product selection available to Dada’s customers. Walmart will continue to operate its own physical stores.

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