Wal-Mart to Become Major Stake Holder in China’s E-Commerce Firm
Wal-Mart revealed that it will take control of majority of the stake in one of China’s e-commerce firm. The firm, called Yihaodian, is going to be controlled by Wal-Mart through stake ownership.
Wal-Mart, the biggest retailer in the world, is seeking to explore new revenue sources to excel in times of increasing competition and extend its dominance in other parts of the world. The retailer’s announcement comes two weeks following another announcement by the retailer regarding Greg Foran, who it said is going to head its operations in the 2nd largest economy of the world.
In a statement, the retailer said that the new investment in the e-commerce firm will increase its stake to about 51% but it will be subject to regulatory approval from the government. The retailer also didn’t provide any details of the cost involved in the deal with the e-commerce firm and it isn’t clear yet about how much stake the firm owns in the Chinese firm.
According to China Market Research Group’s senior analyst, James Roy, in China, e-commerce has seen exponential growth along with other sectors but e-commerce firms being taken over by supermarkets has been seen only during recent times. Adding further, James said that for Wal-Mart, the investment is a good one as the e-commerce firm has a lot of potential. The senior analyst also said that majority of the people who place orders on the website are premium customers, which is a good direction for the company.
The largest retailer in the world, Wal-Mart revealed its intentions to buy minority stake in the e-commerce firm. However, now, it has emerged that Wal-Mart will become the major stake holder in the firm.
Yihaodian is a Chinese website that sells consumer items and grocery. This is something very relevant to what Wal-Mart’s operations are based on but the difference is that the Chinese firm operates on the internet.
