American retailer Walmart has formed a strategic alliance with Chinese e-commerce company JD.com to better serve consumers across China through a powerful combination of e-commerce and retail.
The agreement includes a wide range of business initiatives, covering both online and offline retail. For Walmart, the alliance greatly expands its opportunity in China e-commerce and provides 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.
JD.com, on the other hand, will leverage Yihaodian’s strong brand and business in eastern and southern China and in key product categories such as high quality grocery and household goods, both of which complement its own geographical and product strengths. In addition, JD.com’s customers will gain access to a wide range of new and imported items from Walmart and Sam’s Club.
In addition, Walmart will receive 144,952,250 newly issued JD.com Class A ordinary shares, amounting to approximately 5% of total shares outstanding and the companies will partner in several strategic areas. For example, Walmart and JD.com will work together to leverage their supply chains to increase the product selection for customers across China, including broadening the range of imported products.
Walmart’s China stores will be listed as a preferred retailer on JD.com’s O2O JV Dada, China’s largest crowd-sourced delivery platform, driving online traffic to Walmart stores and allowing customers to order fresh food and other items from Walmart stores for two-hour home delivery, while significantly broadening the product selection available to Dada’s customers. Walmart will continue to operate its own physical stores.
“We’re excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China, as well as for our businesses. We thank the Yihaodian associates for creating a strong brand and business that has helped lead to this opportunity with JD.com,” says Doug McMillon, president and CEO of Walmart.
“JD.com shares similar values in making the lives of customers better. It also 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 also look forward to offering customers a tremendous number of quality imported products not previously widely available in China through Walmart and Sam’s Club,” he adds.
“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,” states Richard Liu, CEO of JD.com. “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.”
“We are also delighted to welcome the Sam’s Club flagship store onto the JD.com platform. Sam’s Club’s unique, high-end product selection meets the demand from China’s increasing affluent consumers for high-quality, imported products and has already proven popular in the Chinese cities where it has stores. JD.com’s reputation for authentic products and superior customer experience make it an outstanding home for these iconic businesses to reach hundreds of millions more customers in China,” Liu elaborates.
Morgan Stanley & Co. LLC acted as Walmart’s financial advisor and Morrison & Foerster LLP acted as Walmart’s legal advisor on this transaction. Orrick Herrington Sutcliffe LLP and Han Kun Law Offices acted as JD.com’s legal advisors on the transaction.
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