The Strategist

Wal-Mart to tie up with Chinese

06/21/2016 - 16:56

Chinese online retailer and the US company Wal-Mart announced creation of a strategic alliance in which Wal-Mart will receive almost 145 million new A class shares of This corresponds to approximately 5% of the Chinese company’s share capital.

Daniel Case
Daniel Case will be own an online platform Yihaodian, belongs to Wal-Mart. The companies will work together on the website’s promotion. Also, Wal-Mart is going to launch Sam's Club flagship store on, which brings about 10% of sales in China to the American player. Both retailers are also going to increase range of products imported in China. 

Under the agreement, Wal-Mart will receive about 145 million new ordinary A class shares of, which is about 5% of all the Chinese retailer’s shares present in circulation. Wal-Mart hired Morgan Stanley as a financial consultant, and Morrison & Foerster will be the legal one. enlisted legal support services of Orrick Herrington Sutcliffe and Han Kun Law Offices.

"We are very happy to announce this important agreement between two leading retailers, which we believe will translate e-commerce in China to the next level, and which will benefit millions of consumers," - said Richard Qiangdong Liu, General Director of

The online platform partnership will help Wal-Mart increase sales in the recessing environment of the local economy and the increasing popularity of online shopping. According to Wal-Mart’s CEO Doug McMillon, it is necessary to the American retailer as China is expected to generate about 25% of global growth in the retail trade in the next five years.

The retailer’s representative noted that Wal-Mart plans to expand range of Yihaodian and Sam's Club with help of imported goods, not widely available in China now. This step will allow JD compete with other major Chinese sites, including Alibaba.

In the last seven quarters, has got ahead of its main competitor in the rate of revenue growth. At the same time, the company’s share of online sales is 23% against 58% for Tmall, which is managed by Alibaba.

Experts point out that the deal with will allow Wal-Mart to strengthen its position in the Chinese market, and increase offline sales. Wal-Mart has operated in the Chinese market since 1996, and currently has a network of 430 stores there.

Earlier it was reported that Wal-Mart Stores Inc. intends to increase its sales to 45-60 billion dollars by 2019, according to the company’s materials.

"Sometimes people say that Wal-Mart is not growing company. I want to say that if we add $ 50-60 billion over three years, will it be count?", - Reuters quoted Doug McMillon speaking at Consumer Goods Forum in Cape Town.

According to the company’s presentation, Wal-Mart expects revenue growth of 45-60 billion dollars in the next three years.

Wal-Mart Stores was founded in 1962. Its headquarter is located in Bentonville (Arkansas, United States). The company employs around 2.2 million people in more than 11.5 thousand stores located in 28 countries.

At the end of 2015-2016 fiscal year (ended January 31), Wal-Mart Stores’ net income has decreased by 11.8% yoy, and amounted to $ 15 billion. Total revenues in the reporting period decreased slightly in annual terms - by 0.7%, and amounted to 482.13 billion dollars.