[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_6":7},"root",{"_5":-5},"user","routes/tag.$slug",{"_8":9,"_76":77,"_84":79,"_85":67,"_86":68},"posts",[10],{"_11":12,"_13":14,"_15":16,"_17":18,"_19":20,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":-5,"_34":35,"_36":37,"_47":48,"_69":70,"_71":72,"_73":74,"_75":32},"documentId","cw2bvq9r08shw0ggt7ovbjxl","title","Wal-Mart Performs Well in Year of Cooperation with JD.com","slug","wal-mart-performs-well-year-cooperation-jd-com","excerpt","Alibaba's purchase of a 36.16 percent stake in SUN ART Retail Group – a $2.9 billion investment – shook business news on November 20. Alibaba, the e-commerce gi...","content","Alibaba's purchase of a 36.16 percent stake in SUN ART Retail Group – a $2.9 billion investment – shook business news on November 20. Alibaba, the e-commerce giant that put forward of the concept of \"new retail,\" and SUN ART, the top offline retailer in China created a fusion of e-commerce and brick-and-mortar business.\n\nThe acquisition drew many comparisons to the cooperation between JD.com and Wal-Mart in 2016.\n\nWal-Mart has cooperated with JD.com for more than a year since selling YHD.com to JD.com in June 2016. It encountered several setbacks in Chinese e-commerce at that time, but it has since regained its strength to explore new forms of offline retail.\n\n

\n\n

The Right 'Chinese Partner'

\n\nAlthough Wal-Mart's strong e-commerce network in the United States has its roots in 1996, the company's e-commerce development in China has been in a bumpy road.\n\nWhen Wal-Mart invested in YHD.com in May 2011, it began to aggressively expand its e-commerce plans for China. It sent many of its senior managing directors to YHD.com. However, due to a disagreement with YHD.com’s founders and the domestic e-commerce situation, Wal-Mart faced a major setback.\n\nIn June 2016, Wal-Mart announced it would sell YHD.com to JD.com for a 5 percent stake in JD.com. It announced a series of cooperations with the online giant, implying that Wal-Mart's first e-commerce venture in China had failed.\n\nMedia mocked the failure, saying \"Wal-Mart selling YHD.com to JD.com is just a sign of their future cooperation.\" It turned out as expected. In June 2016, Wal-Mart and JD.com began to work closely together.\n\nAt the end of 2016, Wal-Mart increased its stake in JD.com to 12.1 percent, making itself the third largest shareholder. On the eve of 2016 Single’s Day, Wal-Mart's Sam’s Club used JD.com as its exclusive online retailer, and Wal-Mart's flagship store also entered JD.com. In addition, JD.com's real-time logistics and O2O platform Xindada received $50 million (336 million yuan) of strategic investment from Wal-Mart. Wal-Mart and JD.com combined their own strengths in O2O service, logistics and retail. In May 2017, Wal-Mart announced its Sam’s Club official flagship store had entered JD.com.\n\nSince finding the \"right partner,\" Wal-Mart's Chinese e-commerce business has seen a rebirth. Abandoning its own operations and embracing JD.com is widely seen as a wise choice for Wal-Mart.\n\n

Wal-Mart Revives, JD.com Expands Offline

\n\nFinancial reports reflect the combining of Wal-Mart and JD.com.\n\nWal-Mart's Q3 results released on November 17 show continued growth in China, with total sales up 4 percent and comparable store sales growth of 2.5 percent, which is the best in four years. \"The driving cause is holiday sales and the development of e-commerce,\" the head of Wal-Mart China said.\n\nWithin 24 hours of the 88 Shopping Festival on August 8, total sales from Wal-Mart's three flagship stores on JD.com hit a record high, 13 times greater than the highest daily sales.\n\nGMV of Wal-Mart on JD.com on September was 30 times higher than in last October, making Wal-Mart one of the fastest growing business on JD.com.\n\nIn addition to the explosive growth of online business, JD.com and Wal-Mart have never stopped working on their offline business.\n\nIn June 2017, Wal-Mart launched its first \"Wal-Mart JD.com Home\" at its Luotian Store in Shenzhen. So far, JD.com and Wal-Mart have opened four stores, including three Wal-Mart JD.com Homes and one Wal-Mart JD.com outlet. The shop is not large and mainly sells electronic goods. Almost all Wal-Mart JD.com offline stores are located in or nearby Wal-Mart retail stores.\n\nWal-Mart JD.com Home, located in Meixihua, Changsha, covers 120 square meters and mainly sells 3C products. It has more than 160 unique products, including bestselling Smartisan mobile phones and the Xiaomi 6. Customers can purchase the products at the same price whether online or offline and enjoy instant delivery service.\n\nDuring the 88 Shopping Festival, Wal-Mart and JD.com connected their inventory in some stores. Wal-Mart China said when consumers buy products on JD.com, if the system determines the item in Wal-Mart's inventory is the nearest point of distribution, the order management system will issue instructions to the corresponding Wal-Mart store. Wal-Mart staff will select and package goods, and JD.com delivery staff would pick them up and transport them to customers.\n\nWal-Mart's cooperation with JD.com's offline stores is focused on 3C products. JD.com has abundant storage of most types of electronic goods, and Wal-Mart provides JD.com with a shopping environment that can attract more customers. It benefits both sides. As for the future, Wal-Mart says it's already practicing some tentative retail forms.\n\nA 4,000- to 5,000-square-meter compact store, similar to Alibaba’s Hema store, is the first option for Wal-Mart. Wal-Mart has opened three compact stores in Wuhan, Kunming and Shanghai. These compact hypermarkets have three main features: an increase in the proportion of fresh food in the store; an integration of online and offline services; and more self-selected commodities. It is quite like Alibaba’s Hema store, where customers can shop, dine and order commodities for delivery.\n\nAs for why they chose the new form, Wal-Mart said it was the result of field research and a study done by the marketing team. China is a large country with abundant products. It is difficult for large malls to form because they are rarely close to housing areas.\n\nAs for the increasing self-selected products, Wal-Mart said “it is a new endeavor, and we want to spread Wal-Mart's brand concept to Chinese consumers.\" Although Wal-Mart met setbacks in its previous try, its attitude toward the new business appears quite confident.\n\nAccording to Wal-Mart's plan, 30 to 40 new stores will be established in China each year, and there may be more stores employing the compact business model in the future.\n\n

Wal-Mart, JD.com Unlike Alibaba, SUN ART

\n\nSince the strategic partnership between Wal-Mart and JD.com, the \"marriage\" of a retail entity and e-commerce giant seems to be the retail industry's preference.\n\nSince Alibaba acquired a $29 billion stake in SUN ART, a new round of comparisons between Alibaba plus RT-MART and JD.com plus Wal-Mart has begun. It is undeniable there are some similarities between the cases, but from the point of view of capital and business, they are completely different.\n\nFrom the capital perspective, the brick-and-mortar retailer Wal-Mart has become a stakeholder in JD.com – it's the reverse of Internet giant Alibaba buying stock in retail enterprises. As for stake ratio, Wal-Mart is just JD.com's third-largest shareholder, while Alibaba’s investment makes it the second largest shareholder in SUN ART. The roles that Wal-Mart and Alibaba will play in future business development are not comparable.\n\nSecondly, from the business perspective, the transformation of Alibaba for SUN ART (mainly RT-Mart) will be entirely subversive and implies a cooperation. It is not impossible to transform RT-Mart into another Alibaba’s Hema store. In addition, the business-to-business model of RT-Mart also supports Alibaba’s retail plan.\n\nThe cooperation between JD.com and Wal-Mart is much superficial. How the business will change is not obvious. In past year, we saw Wal-Mart and JD.com cooperate in some ways, but on others, they were directly competing.\n\nChen Yuefeng, founder of Lingshouke.cn, said, \"Alibaba’s investment in SUN ARTali is a bet for Alibaba’s future. In an open and cooperative business environment, being close-minded and conservative only leads to death. The retail industry has no reason to refuse such integration unless they don't take their future seriously.”\n\nAfter the \"combination\" of Alibaba and SUN ART Retail Group, the cooperation between JD.com and Wal-Mart is worthy of attention.\n\n

This article originally appeared in ebrun and was translated by Pandaily.

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Tag: #SUN ART

Wal-Mart Performs Well in Year of Cooperation with JD.com