In Online Sales Push, Wal-Mart Buys Out Chinese Ecommerce Firm
Wal-Mart Stores Inc has taken full ownership of Chinese e-commerce firm Yihaodian.com, buying out the 49 percent stake that it did not already own to accelerate its push online, the U.S. retail giant said on Thursday.
The investment will help Wal-Mart target China's fast-growing online market at a time when largely brick and mortar retailers are feeling the pinch of competition from online rivals and a slowing of the world's second-largest economy.
Wal-Mart's move also comes after China said last month it will allow full foreign ownership of some e-commerce businesses, with the goal of encouraging foreign investment and the development and competitiveness of the sector.
"[Yihaodian's] local experience, combined with Walmart's global sourcing and our strong local retail presence and supply chain will allow us to deliver low prices on the products customers need in new and exciting ways," Neil Ashe, head of Wal-Mart's e-commerce division, said in a statement.
Wal-Mart, the world's largest retailer, added the purchase of the stake 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 Scott Price told Reuters earlier this year that online retail was important to help tap 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 SA and Britain's Tesco PLC have all seen sales growth slip over the last five years in China, losing market share to local rivals, according to consumer analytics firm Kantar Worldpanel.
The U.S. retailer also announced on Thursday that company insider Wang Lu will take the helm at Yihaodian. The e-commerce firm's CEO and Chairman had quit earlier this month "to pursue their next venture".
In 2012, Wal-Mart took control of Yihaodian by bumping up its stake to 51 percent. Yihaodian, though, is dwarfed in China by e-commerce leaders Alibaba Group Holding Ltd and JD.com Inc.
(Reporting by Adam Jourdan; Editing by Muralikumar Anantharaman)