Chinese e-commerce company JD.com said U.S. retailer Walmart is selling its USD 3.74 billion (EUR 3.37 billion) stake in the company, a move that may hurt Walmart’s presence in the growing Chinese e-commerce space.
After securing record e-commerce grocery performance in the U.S. in the second quarter of 2024, Walmart is aiming to expand its internal business in China, Reuters reported, rather than investing in other firms in the country.
“This decision allows us to focus on our strong China operations for Walmart China and Sam's Club and deploy capital toward other priorities,” Walmart said in a statement, according to Reuters.
Walmart added it is committed to a continued commercial relationship with JD.com and wants to increase online grocery sales of its own brands, but the company will have challenges gaining a foothold in the e-commerce business in China, as other brands in the space have been online for much longer, have better infrastructure in place, and better understand the nuances of Chinese shopping behavior, Fashion Network reported.
“It will be very difficult for Walmart to catch up in e-commerce,” Kantar Worldpanel China General Manager Jason Yu told Fashion Network.
Walmart has a 1.6 percent share of China's overall online market, compared to its 37 percent U.S. e-commerce share, according to Euromonitor International. That Chinese total is far behind Alibaba, which has a market share of nearly 47 percent, and JD.com, which has a 20 percent market share.
Alibaba has 14,000 pickup stations for groceries and other products in rural China alone, and JD.com has nearly 6,000 delivery and pickup stations in almost 2,500 counties and districts across China, according to Fashion Network.
Additionally, Yihaodian, which Walmart sold to JD.com in 2016, owns 250 hubs that offer quick grocery delivery and operates in 200 Chinese cities.
