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Walmart Struggling to Catch Up with Rivals in China's E-commerce Space

| Jun 05, 2016 09:44 PM EDT

Walmart launches its own mobile payment solution, Walmart Pay.

It seems that Walmart has a lot of catching up to do if it wants to become one of the prevailing forces in China's e-commerce space.

Dominating China's online commerce does not appear to be an easy feat for the world's largest company by revenue as it faces two local heavyweights: Alibaba and JD.com.

Walmart only accounts for 1.6 percent of China's online market, per data gathered by Business of Fashion. Meanwhile, its biggest competitors Alibaba and JD.com hold 47 and 20 percent of the market, respectively.

The American retail titan bought Chinese e-commerce site Yihaodian last year. According to Business Insider, Yihaodian operates 250 warehouses in 200 Chinese cities, while Alibaba operates 14,000 in rural China alone. JD.com has about 6,000 pickup stations and delivery warehouses.

To make a dent in the market, Walmart is boosting its grocery e-commerce business. With 46 percent of Chinese consumers buying their groceries online, this niche seems to be a viable focus for Walmart.

"Yihaodian currently offers 250,000 products for same-day delivery, and groceries are on that list, so expect the company to heavily build out this inventory," Business Insider said.

The company's click-and-collect app launched last year could also attract new customers and solidify loyalty of existing ones as it could address their purchasing-related concerns in person.

Imported goods are likewise a key focus with the debut of Global E-Buy in China aimed to compete against the likes of Amazon. This cross-border service present in Walmart's China app "offers approximately 200 products, including some popular U.S.-based brands such as Starbucks, Aveeno, and Burt's Bees," noted Business Insider.

Launched in March, the service caters to Chinese consumers' growing demand for imported goods.

For Walmart to succeed in the Chinese e-commerce space, it has to "find the right product mix to offer in the 117 cities and 25 provinces in which it operates," Fortune noted in a report exploring the retail giant's struggles in China, home to about 1.3 billion consumers.

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