Walmart China: three latest developments

Date : 24 October 2016

Walmart China has launched a flagship store on JD.com and revealed two strategic investments in Dada, a logistics and grocery O2O e-commerce platform, and China food safety research.

Walmart opens flagship store on JD.com

Walmart has opened its flagship online store on JD.com to deliver imported products to mainland China’s consumers. Drawing on JD.com’s logistic network, Walmart online store promises two-hour delivery to shoppers who live within miles of 20 Walmart stores across China. Meanwhile, Sam’s Club, the membership wholesale division of Walmart, also operates a flagship store on JD.com and allows non-members to make orders online and offers same-day and next-day delivery services.

This follows the strategic alliance Walmart and JD.com formed in June 2015, where Walmart sold its ecommerce site Yihaodian to JD.com, in exchange of 5% stake in JD.com. In October, Walmart increased its stake in JD.com to 10.8%.

Investment in Dada platform

Walmart has announced a US$50m strategic investment in New Dada, China’s largest local on-demand logistics and grocery O2O e-commerce platform. The move is an extension of Walmart’s new agreement with JD.com, which will see the two sides use New Dada’s network to offer customers two-hour delivery on groceries ordered via Walmart stores through the JD Daojia Dada app.

Investment in China food safety research

Walmart and its foundation are investing US$25m over five years in food safety research in China. The funding will support projects in applied science, education and communications. “By bringing together the best food safety thinkers from across the food ecosystem, we’ll accelerate food safety awareness and help make Chinese families safer and healthier,” said Walmart Chief Executive Officer Doug McMillon

This initiative will support Walmart’s strategic pillar of being “the most trusted retailer.” Over recent years it has focused on driving improvements in compliance and ethics, investing in talent and processes. The retailer views this as an advantage, particularly as the world becomes more transparent and consumers will have a wider window into the company. Walmart will continue to focus in this area, ensuring that from a reputational point of view, everybody is aware of where the business is.

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