Walmart Sells Entire Stake in China’s JD.com for $3.6 Billion

Walmart, the U.S. retail giant, has officially divested its entire stake in JD.com, marking the end of one of the most significant foreign investments in China’s burgeoning e-commerce sector. The move comes as JD.com, along with its rival Alibaba, faces mounting challenges in a slowing Chinese economy, where consumers are tightening their belts and focusing on discounted and budget-friendly products.

Though Walmart did not disclose the specifics of the transaction, including the exact number of shares sold or the financial details, the company confirmed that it no longer holds any shares in JD.com. As of December 31, Walmart owned around 289 million shares in the Chinese e-commerce company, equating to a 9.4 percent ownership stake, according to JD.com’s annual report from April.

Earlier reports from Bloomberg estimated that Walmart pocketed approximately $3.6 billion from the sale, a development that sent shockwaves through the market. JD.com’s shares, listed in Hong Kong, plummeted nearly 9 percent following the announcement on Wednesday, underscoring the significance of Walmart’s exit.

Walmart’s divestiture marks the conclusion of a strategic venture that began nearly a decade ago, driven by the company’s efforts to strengthen its foothold in the Chinese market. In 2016, Walmart handed over control of its struggling e-commerce platform, Yihaodian, to JD.com in exchange for a 5 percent stake in the company. This move aligned Walmart with the major players in China’s online retail landscape, as JD.com and Alibaba vied for dominance.

Over the years, the partnership between Walmart and JD.com led to several collaborative efforts. Among these was the launch of an exclusive Sam’s Club flagship store on JD.com, which gave millions of Chinese consumers access to premium products backed by JD.com’s efficient delivery network. Additionally, Walmart established a Global Store on JD Worldwide, the company’s cross-border e-commerce platform, and introduced a two-hour delivery service from its physical stores in select cities.

Despite the promising initiatives born out of this partnership, Walmart’s decision to sell off its stake reflects a shifting strategy as the retail landscape in China evolves. With the transaction complete, Walmart is signaling a recalibration of its approach in the world’s second-largest economy, where competition and consumer behavior continue to evolve rapidly.

This sale concludes a significant chapter in Walmart’s China story, one that illustrates both the opportunities and challenges of operating in the complex Chinese market.

References:

• JD.com Annual Report, April 2024
• Bloomberg, “Walmart Reaps $3.6 Billion from JD.com Stake Sale,” October 2024