Walmart sells entire JD stock as it looks to focus on its own Chinese businesses TechNode

US retail giant Walmart has exited its eight-year stake in China’s JD, one of the country’s largest e-commerce platforms, according to an SEC filing by Walmart on Tuesday. The US company sold about $3.7 billion of its shares as part of the deal.

Hong Kong-listed JD shares fell nearly 12% at the open on Wednesday. In a bid to stabilize the share price, the company soon responded with a $3.9 billion share buyback plan.

Why it’s important: The end of the partnership comes as Chinese online retailers grapple with a slowdown in consumer spending and stagnant retail revenue growth.

Details: “This decision allows us to focus on our strong operations in China for Walmart China and Sam’s Club and allocate capital to other priorities,” Walmart said in a statement. Its strategic partnership with JD began in 2016 and deepened in 2018 when both parties invested in on-demand delivery company DaDa.

• Sam’s Club has become a major source of income for WalmartChina over the past few years as Chinese shoppers have flocked to the wholesale supermarket chains, which offer free samples and great prices.
• At least ten Sam’s Club stores will open in China by the end of this year, according to public records. The stores will be relocated to third-tier cities, a marked change from the chain’s slow expansion in its early days in China.
• JD indicated it was “confident about future collaboration” between the two companies, while the U.S. retailer said it would continue its “business relationship” with JD, without elaborating. JD-affiliated DaDa is Sam’s Club’s exclusive delivery operator when shoppers place orders online.
• As one of the titans that once dominated China’s e-commerce market, JD is now coping with Pinduoduo’s budget-focused momentum amid a slump in China’s consumer market. The company’s stock price has shed nearly 70% of its value since its 2021 peak.

Context: Last week, JD reported a 1.2% year-on-year increase in revenue to RMB291.4 billion ($40.8 billion), while posting a record second-quarter net profit. Its retail business posted a 1.5% profit increase in the period that included China’s second-largest shopping festival, 618. The retail unit posted a 6.8% increase in net revenue over the same period last year.

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