Wal-Mart Stores Inc. further extended its strategic alliance with JD.com through a $50 million strategic investment in New Dada, the crowdsourced logistics and grocery e-commerce platform in China.
New Dada was formed as an independent joint venture in April through the merger of Dada and JD Daojia. On Oct. 20, Wal-Mart and JD.com said that the joint venture would provide a two-hour delivery window to consumers who order from more than 20 Wal-Mart stores through the JD Daojia Dada app. The number of Wal-Mart stores is expected to double by the end of the year.
Other initiatives between the American discounter and the Chinese e-commerce platform include the opening of a Sam’s Club Flagship Store on JD.com today, and the presence of a Wal-Mart Global store on JD Worldwide, JD.com’s cross-border platform.
Philip Kuai, New Dada’s chief executive officer, said his company is looking “forward to deepening our cooperation with Wal-Mart as China’s [online to offline] retail industry continues to evolve and grow.”
Wal-Mart chief executive officer Doug McMillon said: “All around the world, we are creating seamless shopping experiences that bring together our stores, sites and apps to make shopping faster and easier. Our alliance with JD and cooperation with New Dada will enable seamless shopping to millions of customers across China.”
Wal-Mart and JD entered into a strategic alliance in June. Since then, Wal-Mart has upped its investment in JD.com to 10.8 percent. In September, Wal-Mart completed a $3.3 billion deal to buy Jet.com, a two-year-old e-commerce start-up. The digital investments by Wal-Mart signal a broader push by the retail giant to understand the e-commerce business and compete with Amazon.
The digital e-commerce leader, Amazon began moving into the brick-and-mortar space earlier this year. On the agenda are freestanding stores and pop-up shops. Amazon ceo Jeff Bezos told shareholders in May that the company plans to be more aggressive in its expansion into physical stores. The e-tailer has been growing its grocery business, becoming a competitor of Wal-Mart, and is now reportedly eyeing the opening of local convenience stores.
Amazon has been growing the number of cities where it offers same-day delivery service, and its Prime members in select cities can receive two-hour service. JD.com already has that capability through its distribution network. The Chinese firm also uses drones to deliver packages to consumers. JD’s know-how is expected to provide Wal-Mart with ideas to improve its online business to compete more effectively against Amazon.