Walmart doubles down on China with e-commerce buyout

The mega retailer takes full ownership of China-based Yihaodian, an online marketplace that sells food, home goods, electronics and more.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
2 min read

Walmart is expanding its online presence in China, thanks to its Yihaodian acquisition. Walmart

Walmart is expanding its footprint in China's e-commerce industry, the company announced on Thursday.

Walmart has acquired the 49 percent stake it did not previously own in China-based Yihaodian, giving it full control over the fast-growing online marketplace. Walmart didn't say how much it paid for the company. Wang Lu, Walmart's current head of e-commerce in Asia, will add Yihaodian management to his duties.

Walmart is the world's largest retailer with over 11,500 stores and nearly 260 million weekly customers. The company operates in 28 countries around the world, including China, and has over 2 million employees. In its last fiscal year, Walmart's revenue tipped the scales at $486 billion.

Despite its massive size, Walmart has been actively building out its e-commerce business. The company has taken the fight to Amazon in the US, offering same-day delivery on a items like groceries, and has tested a free three-day shipping program called ShippingPass for $50 a year to rival Amazon's $99 -a-year Prime membership, which offers free two-day delivery and other perks.

Like other companies, Walmart sees China as a massive growth opportunity. As China's economy continues to grow, the number of consumers entering the market is on the rise. That has fueled American companies' desire to expand their presence in China. Apple has been especially aggressive in China, expanding its footprint at a rapid rate. In the last couple of years, the company has opened a slew of brick-and-mortar stores in China. In March, Apple said it opened six China stores in the trailing six weeks. Amazon, another US-based company, is also trying to expand rapidly in China's e-commerce space.

But even as US companies look to expand their fortunes in China, they're met with a slew of Chinese competitors that have established and loyal customer bases, including Alibaba's Tmall. Breaking through and being truly successful in China has proven difficult for many US companies.

Despite the stiff competition, the opportunities for growth are major for companies from all over the globe -- especially in e-commerce. In February, research firm Forrester reported that China's consumers will spend $1 trillion by 2019. In 2013, that figure stood at $307 billion.

Although it's smaller than many of its top competitors, Walmart's Yihaodian has benefited from that rapid growth. The online marketplace, which was founded in 2008, has grown from 50,000 available products in 2010 to more than 8 million today. In 2010, two years before Walmart acquired its 51 percent stake in the company, Yihaodian had 4 million registered customers. It now has 100 million registered customers.

"We will continue to share plans as we move forward," a Walmart spokesman said, "but at the moment we are focused on continuing to build out the pure e-commerce experience that Yihaodian has created, and evaluating additional opportunities to use Walmart's global strengths to provide customers in China with new products at low prices and new experiences across online, mobile and stores."