Wal-Mart has nearly doubled its stake in Chinese e-commerce giant JD.com to 10.8 per cent from 5.9 percent, according to a filing released late Wednesday.
The SEC filing, a Schedule 13G, disclosed that the U.S. discounter now owns slightly more than 265.3 million shares of JD, or a 10.8 percent stake.
“Our alliance with Wal-Mart continues to strengthen and we welcome this sign of confidence in us,” said a JD spokesman. He declined to elaborate further on the details of the partnership.
Wal-Mart took its initial stake in JD, Alibaba’s number one rival, in June. The $1.5 billion deal, described as a “strategic alliance” by the parties involved, saw JD acquire ownership of Wal-Mart’s China-based Yihaodian marketplace. In exchange, Wal-Mart received nearly 145 million newly issued JD Class A ordinary shares, representing about 5 percent of the Chinese e-tailer’s total shares.
The deal allowed Wal-Mart access to JD’s delivery network and consumer base, although Wal-Mart also gave up the right to operate a new site in China.
“I think building on this partnership makes sense for both brands. Wal-Mart’s range of products that JD can sell as imported products are going to continue to attract a lot of interest from consumers,” said Benjamin Cavender, a senior analyst at China Market Research Group.
“Meanwhile Wal-Mart, which continues to struggle with its brick-and-mortar stores [in China], will be able to take advantage of JD’s e-commerce acumen and its ability to flexibly adapt its service offering to meet the needs of Chinese consumers,” he added.
The growing importance of B2C has intensified competition between Alibaba’s Tmall and JD.com. The former has long-held a commanding lead in market share, but that lead has recently been eaten away at by its Beijing-based rival.