US multinational Wal-mart has unveiled plans to take a controlling share in Chinese e-commerce firm Yihaodian, in a bid to secure new revenue sources and boost its online presence in China.
The moves comes a fortnight after Wal-mart appointed industry veteran Greg Foran as chief of its China operations as part of a series of leadership changes, Reuters reported.
Wal-mart, which already holds a minority stake in Yihaodian, said in a statement that the fresh investment will bring its share to around 51 percent, and will be subject to government regulatory approval.
The world’s largest retailer did not, however, provide any financial details of the deal, or specify what portion of Yihaodian it already owns. Wal-mart has more than 350 stores in China, and in the three months to the end of October reported a 16.1 percent increase in sales there from the previous year.
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The company is relatively green when it comes to e-commerce in the US, where Amazon leads the market. However over the past year Wal-mart has sought to boost its internal expertise by buying up the US technology companies Kosmix, which organizes information from social media sites like Facebook, and Small Society, which develops apps for mobile shopping.
Yihaodian was founded in 2008, and is one of the fastest-growing companies in China. It sells more than 180,000 products, ranging from grocery items to electronics, and runs logistic centres in major metro areas like Shanghai, Beijing and Guangzhou, according to Fox Business.
It won first place in last year’s Deloitte Technology Fast500 Asia Pacific, though the Chinese consumer e-commerce market remains dominated by homegrown online retailer Taobao, The Financial Times reported.
With more than 170 million Chinese shopping online, China’s e-commerce industry is expected to surpass $118 billion in gross merchandise value in 2011. China is expected to become the world’s largest e-commerce market in 2015, according to a recent report by Boston Consulting Group.
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