News this week that Walmart acquired a majority stake in one of China’s fastest growing e-commerce companies positions Walmart to become a dominant multichannel player in China far faster than it ever would have on its own.
Walmart is no stranger to China, but after 15 years it still has only 370 stores, and that’s after opening 42 units this year in an unprecedented burst of expansion. Walmart’s been in China long enough and understands where retail is heading well enough to know that the faster path to growth in a country with more than one billion people is likely to look a lot different than it did in the United States. Accordingly, Walmart upped its ownership stake in Yihaodian to 51% less than a year after making its initial investment. That’s good news for Yihaodian, which gains access to increased capital to grow and its good for Walmart because it just shortened its e-commerce learning curve.
“This investment further enables Walmart to deliver a superb customer experience to Chinese consumers that are already connected to the world through smart phones and social media,” said Neil Ashe, Walmart’s relatively new president and CEO of global e-commerce. “We are on track to create the next generation of e-commerce, offering the latest in online innovations to give our customers a unique shopping experience.”
Ashe said Walmart’s additional investment in Yihaodian, “Demonstrates that we are committed to investing in China in a key growth industry and developing all that goes with it: logistics, infrastructure, innovative talent and new technologies that will help China meet its development goals.”
Yihaodian is an early stage company that was founded in July 2008, and in less than four years has achieved a significant position in online grocery sales and such categories as baby, consumer electronics and apparel. From its distribution facilities in such major population centers as Shanghai, Beijing, Guangzhou, Wuhan and Chengdu.
Yihaodian provides more than 180,000 products with same day and next day delivery of products. The number of items provided today is more than double the 75,000 products offered when Walmart made its initial investment in May 2011 and new facilities in Wuhan and Chengdu have also been added during that time.