Walmart said it unloaded its entire stake in JD.com, one of China’s biggest e-commerce companies, unwinding one of the largest investments in a Chinese retailer by a foreign rival.
In a securities filing on Tuesday, Walmart said it no longer held any shares of JD.com, but it did not disclose how many shares it sold or how much it raised with the sale. The retailing giant said it had 289 million shares of JD as of Dec. 31, 2023. In its annual report filed in April, JD stated that Walmart was a 9.4 percent shareholder.
“This decision allows us to focus on our strong China operations for Walmart China and Sam’s Club, and deploy capital towards other priorities,” Walmart said in a statement, adding that it would continue to have a “commercial relationship” with JD.
Bloomberg reported earlier that Walmart had raised $3.6 billion from the sale. Shares of JD.com listed in Hong Kong fell nearly 9 percent on Wednesday.
The sale closed the chapter on an investment by Walmart born out of desperation to gain a greater foothold in the Chinese market. In 2016, Walmart sold its Yihaodian website to JD.com, which along with Alibaba dominated China’s online shopping industry, and acquired a 5 percent stake in the company.
The e-commerce partnership between Walmart and JD included collaborating on areas like fulfillment and delivery. When they first came together, Chinese consumers were rapidly shifting to online shopping and Walmart was having a hard time displacing homegrown competitors.
Now, while the broader Chinese economy is laboring under a slowdown in consumer spending, Walmart is doing well in China. Its quarterly sales in the country have grown by more than 10 percent for most of the last two years, driven by strong sales online and the popularity of its Sam’s Club warehouse stores.
Walmart said on Thursday that sales at stores in the United States rose just over 4 percent, to $115.3 billion, as consumers stung by high inflation over two years are drawn to the retailer’s lower prices. Its U.S. e-commerce business jumped 22 percent.
At the same time, JD has struggled to maintain its market share and faces growing competition from the discount shopping app Pinduoduo and the move into e-commerce by social media platforms such as Xiaohongshu, the country’s version of Instagram, and Douyin, the app owned by ByteDance, which runs TikTok outside of China.
Last week, JD announced that revenue grew a modest 1 percent in the second quarter compared with a year earlier. The company said its profit nearly doubled, attributing the gains to an “increase in government subsidies and a decrease in investment related losses.”
JD said on Wednesday that it repurchased $390 million worth of its own shares, a move would help bolster its stock price.
A JD spokeswoman said the company was “full of confidence in the future cooperation between the two sides” but declined to elaborate.
As part of Walmart’s investment in JD in 2016, the retailer had the right to have one of its senior executives attend all of JD’s board meetings as a nonvoting observer, according to JD’s annual report.
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