Wal-Mart is Forming a Closer Relationship with Chinese E-commerce Giant JD.com.

Struggled to Expand into Chinas E-commerce Market

The worlds largest retailer has struggled to expand into Chinas e-commerce market due to its relatively late arrival. It only began a feasibility study of e-commerce in China in 2007. By that time， Alibabas Taobao， a consumer-to-consumer （C2C） shopping website， was already recording 43.3 billion yuan （$6.56 billion） in sales， more than the China sales for Wal-Mart and Frances Carrefour combined. But WalMart decided not to act on the studys results， citing high logistics costs and its size in China， a person leading the study later said.

Since then， e-commerce has grown exponentially in China. The number of online shoppers tripled from 130 million in 2010 to 380 million last year， according to global marketing research firm Nielsen. Internet giant Alibaba Group Holding Ltd. currently dominates the market， followed by JD.

Wal-Mart finally realized its misstep and started playing catch-up in 2010， when it launched a website for Sams Club， giving club members the option of ordering online and getting delivery in every city with a brick-andmortar Sams store.

It then invested in Yihaodian in 2011 and took full ownership of the company last year. But the business did not take off and the websites cofounders quit， which market analysts attributed to disagreement on how to develop the company. While WalMart focused on making profits immediately， Yihaodians two cofounders wanted to expand first by incurring losses for a few years， market analysts said.

Yihaodians market share shrank from 2.6 percent in 2013 to less than 0.3 percent in 2015， according to e-commerce research website 100ec. cn.

The partnership with WalMart comes as JD tries to increase its presence in the competitive e-commerce landscape. Based in Beijing， JD has a strong presence in northern China but is still dwarfed by the Hangzhou-headquartered Alibaba in the eastern part of the country， an employee of the company who asked to stay anonymous said.

Yihaodian， which was founded in 2008 in Shanghai and has a strong customer base in the region， can help JD "complement its own geographical and product strengths，" according to the statement announcing the deal.

Wal-Mart Sells Main China Website for $1.5 Billion Stake in JD.com

The global retailing giants Yihaodian online store failed to gain traction on its own， and will pool resources with Chinas second largest e-commerce player

Wal-Mart Stores Inc. will exchange its main Chinese shopping website for around $1.5 billion worth of shares in JD.com Inc.， Chinas second largest e-commerce company， in hopes of bolstering its presence in the countrys burgeoning but cutthroat online shopping market.

Wal-Mart will sell its Yihaodian website for 145 million newly issued class A shares in JD.com， amounting to about 5 percent of the Chinese company， the pair said in a joint statement on June 21.

JDs American depositary shares closed up 4.62 percent at $21.06 following the news， valuing WalMarts stake at roughly $1.5 billion. Wal-Mart shares rose slightly to $71.10 on the New York Stock Exchange.

Under the deal， JD will take over ownership of Yihaodians brand， website and mobile app. Wal-Mart will continue to operate Yihaodians business. In addition， Wal-Marts membership-only Sams Club will open a flagship store on JDs platform and have access to JDs delivery network， according to the statement.

Wal-Mart and JD will also pool their supply chains to increase product selection， which will include a broader range of imported products， the statement said.

Wal-Mart Determines to Grow Its Global Online Sales

Wal-Mart and JD.com launched a strategic alliance in June when the former sold its Chinese online shopping site， Yihaodian， to the latter for equity worth about $1.5 billion.

Some saw the deal as a setback for Wal-Mart， which operates more than 400 brick-and-mortar stores in China and has been in the country for about 20 years.

Wal-Mart bought a 17.7% stake in Yihaodian in 2011 and took full control in July 2015. But the website struggled in a market crowded with domestic players， with Alibaba， JD.com and Suning vying for a customer base estimated last year at 380 million， three times more than there were in 2010， according to the marketing research firm Nielsen.

Under Wal-Marts control， Yihaodians share of the online shopping market shrank to less than 0.3% in 2015 from 2.6% in 2013， according to the e-commerce research website 100ec.cn.

The JD.com tie-up reflects WalMarts determination to grow its global online sales， which totaled $14 billion last year. Wal-Mart plans to invest $11 billion in online shopping ventures during the companys 2017 fiscal year.

Wal-Mart recently bought the U.S. e-commerce company Jet.com and is currently looking at investing in Flipkart， Indias largest online shopping site， media reports say.

Wal-Mart and JD.com is Establishing a Stronger Alliance

ating profit rise in the third quarter desWal-Mart Stores Inc. is taking another step at Chinas highly competitive online shopping market by establishing a closer relationship with Chinese e-commerce giant JD.com ahead of Chinas No. 1 shopping day.

The retailers in October announced new measures that expand on their 4-month-old alliance just in time for Chinas busiest shopping day： Nov. 11， the annual Singles Day extravaganza.

JD.com agreed to enlarge its website to include a flagship store for Wal-Marts "warehouse club" division， Sams Club. A warehouse club is a store that sells wholesale quantities of products to the public.

The companies also agreed to let Wal-Mart shoppers in Guangzhou and Shenzhen take delivery of purchased products through JD.coms delivery network. Also， during a 10-day promotional period， JD.com shoppers will be able to buy items through Sams Club at member-discount prices.

The closer partnership is designed to give JD.com shoppers wider access to a variety of imported products that Wal-Mart sells， a JD.com statement said.

On Singles Day last year， JD.com reported about 10 million purchases during a 10-hour period， up 180% from the previous year. That same day， rival Alibaba Group — Chinas largest e-commerce company and creator of Singles Day in 2009 — reported 91 billion yuan （$13.5 billion） in sales through its Tmall website.