Walmart has its own plan for China
Walmart was the largest shareholder in Chinese e-commerce company JD.com for eight years, during which time the American retail giant owned 5.19% of the Amazon and Alibaba rival.
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Walmart not only wanted to gain a foothold in the rapidly growing Asian online market, but also to keep rival Amazon at bay. What’s more, JD.com is known for its advanced logistics capabilities, which are provided by artificial intelligence and automated warehouses. Americans could also benefit from this knowledge.
Physical Expansion: Walmart Changes Tactics
However, the hypermarket giant took a different tack: all shares were sold for $3.74 billion, Reuters reports. Walmart plans to use the money to focus on its own business in China. The plan is to open twice as many warehouses for Sam's Club and maintain only its retail partnership with JD.com.
Walmart’s sale of its stake in JD.com comes as China’s consumer market slumps. Demand and spending are falling after years of spectacular growth, while rivals Alibaba and Temu owner Pinduoduo have engaged in a fierce price war that is putting further pressure on revenue and margins. Walmart nonetheless reported a 17.7% jump in China sales in the second quarter.
