Walmart Inc has raised about US$3.6 billion by selling its stake in Chinese e-commerce firm JD.com Inc (京東), winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese technology giants.
The US retailer sold 144.5 million shares for US$24.95 apiece, people familiar with the matter said. That was a discount of 11 percent to Tuesday’s close in the US, according to Bloomberg calculations.
JD.com’s Hong Kong-listed shares yesterday fell as much as 12 percent, leading a broader sell-off in Chinese e-commerce and technology stocks. JD.com also bought back US$390 million of its shares yesterday.
Photo: EPA-EFE
Walmart is refining its strategy in the world’s second-largest economy, where its long-standing e-commerce partner is struggling along with traditional rivals Alibaba Group Holding Ltd (阿里巴巴) and Temu-owner PDD Holdings Inc (拼多多).
The deal also comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.
“I expect Walmart will be disappointed with the horse they backed,” said Mark Tanner, managing director at marketing agency China Skinny. “It doesn’t feel like the original ambitions have quite panned out as planned at the time of acquisition.”
The sale would enable Walmart to “better focus on the country’s strong development,” including Sam’s Club and its hypermarket business, and “allocate funds to other priorities,” a company statement said.
The retailer said that it would continue to cooperate with JD.com, describing the Chinese e-commerce firm as a “precious partner.”
JD.com has confidence in future collaboration between the two companies, it said in a separate statement.
Walmart’s Sam’s Club franchise has been a bright light for the company, making it the only hypermarket chain to post sales growth last year among the top five players, according to the China Chain Store & Franchise Association.
In China, the unit offers premium goods with a membership model that is now being copied by rivals, while the company’s other basic hypermarkets are struggling along with competitors.
Walmart is likely to redeploy the capital from the sale to expand its own stores, a Citigroup Inc report said.
JD.com’s second quarter results beat expectations — even though revenue grew a mere 1.2 percent. That extended a string of single-digit percentage quarters dating back to 2022.
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