Tuesday, October 18, 2016

Wal-Mart Increases Investment in JD.com, China’s Second-Largest Online Retailer

Wal-Mart Increases Investment in JD.com, China’s Second-Largest Online Retailer

 Employees work at a JD.com logistics center in Langfang, China.

A few days ago, Wal-Mart Stores had doubled its investment in JD.com which is the China’s second- largest online retailer, that move would give it observer status at JD.com Inc. ‘s board meetings. A lot of foreign companies want to crack the Chinese market, the Arkansas-based retailer had opened an approximately 5.9% stake in Chinese online retailer in June, as part of a deal under which it sold its Chinese E-commerce business to JD.com. Currently, the Chinese internet company Tencent Holdings Ltd. is the only strategic partner of JD.com and has the board seat, but under the terms of that deal, the U.S. based retail giant would increase its stake, and gaining observer status. Wal-Mart will have long-term strategy with JD.com and increased its stake to about 10.8% on Oct 5th. Even though online shopping continues to expand in China and surpass the U.S., the China market is still dominated by domestic competitors such as JD.com and Alibaba Group Holding Ltd.. According to the research, China’s online retail spending reached $589 billion last year, compared with $334 billion in the U.S. Wal-Mart’s shares, up 17% this year, closed down at $71.67 on Oct 5th, but regained the 8 cents in after-hours trading. At the same time, JD’s American depositary receipts, down 13% this year, rose 5.8% in after-hours trading to $29.55.


1 comment:

  1. Do you believe this will ever change? How could things be for China if things were not dominated primarily by domestic competitors?
    This was a great summary about the article by the way!