Can Walmart’s Chinese Investments Bridge U.S.-China E-Commerce Gap?

JD.com & Walmart

Walmart increased its stake in Chinese e-Commerce retailer JD.com from 10.8% to 12.1%. With the expanded investment, Walmart’s stake in JD.com is worth approximately $4.87 billion. This marks the second time Walmart has increased its investment in JD.com since selling its Chinese e-Commerce operations to the company in June 2016.

The retail giant is aggressively expanding its influence and operations in China in an attempt to increase competition with Alibaba. In October 2016, Walmart made a $50 million investment in Chinese on-demand logistics and grocery platform New Dada. As part of the agreement, Walmart and JD.com use the New Dada network to offer customers two-hour delivery on groceries ordered from Walmart brick-and-mortar stores through the JD Daojia Dada app.

The more Walmart tries to break down Chinese e-Commerce barriers, the greater chance other brands will have to follow suit. With Forrester predicting total Chinese e-Commerce revenue will climb to $1.1 trillion in 2020, there is still a tremendous opportunity for American brands to create gateways to — and invest in — Chinese e-Commerce businesses.

After selling Yihaodian e-Commerce marketplace to JD.com, Walmart now operates more as an investor in Chinese e-Commerce than as an actual seller. But this gives the retail giant an opportunity to better understand Chinese consumers and work with the logistics platforms necessary to effectively cater to their needs.

U.S. retailers that don’t have the bandwidth or infrastructure capable of bypassing Chinese barriers could look at Walmart as an example for how to invest in Chinese sellers. With Walmart continuing to boost its investments in JD.com, the company is showing plenty of confidence that the country’s e-Commerce growth will continue to benefit its business in the long run.

While most U.S. brands aren’t big enough to be able to provide financial backing to a large Chinese brand — especially one with a $42 million market capitalization such as JD.com — they can seek out smaller retailers to potentially partner with if they share common offerings.

Read original article on Retail touch points.

To find our more about setting up online store in China, please read our previous post “How To Open Your Online Store On TMall (New)” and our webpage: “Set up TMall store, Taobao store and other types of online store”.

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