Wal-Mart Stores, Inc. (WMT) Acquires Remaining 49% Balance In Chinese Online Retailer, Yihaodian, Riding On China’s Relaxed Foreign Investment Policies
Wal-Mart Stores, Inc. (NYSE:WMT) is now the full owner of Yihaodian, a Chinese online retailer in the groceries category. Previously, Wal-Mart owned 51% of Yihaodian, but has also acquired the remaining 49% that it didn’t already own. The move by Wal-Mart to gobble the whole of Yihaodian comes amid China’s relaxation of foreign investment policies.
Retailers of all sizes and shapes are seeking a slice of China’s booming online retail industry, which is growing faster than the global average. Wal-Mart Stores, Inc. (NYSE:WMT) is one of the retailers showing great interest in grabbing a larger share of China’s e-commerce market. In the latest move, Wal-Mart has taken over Yihaodian after earlier increasing its stockholding in the online supermarket company.
Wal-Mart acquires stake from former executives
By taking over the entire of Yihaodian, Wal-Mart acquired the stake it already didn’t own from an investor called Ping An Group and some former Yihaodian executives. From the former executives, Wal-Mart dealt with former chairman Yu Gang and former CEO, Liu Junling. The two recently left Yihaodian to start a new company.
Wal-Mart didn’t reveal the amount of money it paid to acquire the remaining 49% stake in Yihaodian. However, it remains clear that the retailer is interested in broadening its footprint in China’s retail space, both in brick-and-mortar stores and online.
Physical stores expansion
It is estimated that 46% of Chinese shoppers buy groceries online, compared to the global average of 25%. Although Wal-Mart Stores, Inc. (NYSE:WMT) is trying to deepen its e-commerce presence in China, the company also continues to expand its physical store network. Wal-Mart intends to open some 115 new stores in China between 2015 and 2017. The company already operates 413 stores in China.
China wooing foreign investment
Beijing is becoming friendlier to foreign investors as China faces economic slowdown. The administration in Beijing recently relaxed foreign investment policies in the e-commerce industry, allowing more foreign investments. Wal-Mart Stores, Inc. (NYSE:WMT) has seized the opportunity to bring Yihaodian under its wing.
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