SHANGHAI • Wal-Mart Stores has taken full ownership of Chinese e-commerce firm Yihaodian.com, buying out the 49 per cent stake that it did not already own, to accelerate its push online, the United States retail giant said yesterday.
The investment will help it target the fast-growing online market in China at a time when largely brick-and-mortar retailers are feeling the pinch from online rivals and a slowing in the world's second-largest economy.
The move also follows an announcement by China last month that it would allow full foreign ownership of some e-commerce businesses, to encourage foreign investment and the development and competitiveness of the sector.
"(Yihaodian's) local experience, combined with Wal-Mart's global sourcing and our strong local retail presence and supply chain, will allow us to deliver low prices on the products that customers need, in new and exciting ways," Mr Neil Ashe, who heads Wal-Mart's e-commerce division, said in a statement.
Wal-Mart, the world's largest retailer, said the move would help accelerate its e-commerce business in China, and boost coordination between its physical and online stores. It did not disclose the price paid for the stake, which was bought from former executives and financial services group Ping An.
Wal-Mart's Asia head, Mr Scott Price, told Reuters earlier this year that online retail was crucial to tapping China's younger generations, and that the firm would increasingly look to weave together its online and offline presence in the market.
Wal-Mart, France's Carrefour and Britain's Tesco have all seen sales growth in China suffer over the past five years, losing market share to local competitors, according to consumer analytics firm Kantar Worldpanel.
The US retailer also announced yesterday that company insider Wang Lu would take the helm at Yihaodian. The e-commerce firm's chief executive and chairman quit earlier this month "to pursue their next venture".
Wal-Mart has struggled to adapt to the local culture and buying patterns in China.
Competition from incumbent retailers and a series of food scandals have hobbled the company's attempts to boost market share in the country. It closed some of its unprofitable stores last year, while committing to open 115 others and invest 370 million yuan (S$81 million) in renovating existing locations this year.
Wal-Mart acquired a 51 per cent stake in the online retailer in 2012, when it sought to tap China's e-commerce boom.
Yihaodian, founded in 2008, sells a wide range of online products that include imported infant formula, fresh vegetables and iPhones.
It is ranked fifth in China's Internet retail market with a 2 per cent share - trailing industry leader Alibaba Group Holding, which has 44 per cent, and JD.com, which takes second place with 14 per cent, according to research firm Euromonitor International.
REUTERS, BLOOMBERG
