JD.com CEO and founder Richard Liu speaks at the NASDAQ Market site at Times Square in New York. (Photo : Reuters)
JD.com has announced that it has formed a strategic partnership with Wal-Mart China after its shares went up recently, according to a report by CNBC.
The company's stock, which re-opened about 9 percent after it was initially held, closed the day up more than 4 percent. On the other hand, Wal-Mart shares were higher.
Under the partnership, JD.com will manage the website, brand and app for e-commerce platform Yihaodian, while Wal-Mart will maintain control of the subsidiary's direct sales business.
The company plans to further develop the brand, which is popular in eastern and southern China, Richard Liu, CEO of JD.com, said in a statement.
The report said that Sam's Club China is expected to gain more accessibility with the opening of a flagship store on JD.com, based on the deal.
"Sam's Club's unique, high-end product selection meets the demand from China's increasing affluent consumers for high-quality, imported products and has already proven popular in the Chinese cities where it has stores," Liu said.
About 5 percent of the total shares outstanding in JD.com will be received by Wal-Mart, the report said.
Doug McMillon, president and CEO of Wal-Mart, called JD.com a "very complementary business and ideal partner," adding that the two companies have similar values.
"We also look forward to offering customers a tremendous number of quality imported products not previously widely available in China through Wal-Mart and Sam's Club," McMillon said in a statement.
In March, JD.com also announced its partnership with Tencent Holdings Ltd. aimed at challenging Alibaba in the mobile sector, which is seen to transform the country's e-commerce industry.
The partnership between the two companies has given JD.com a headline spot in WeChat, introducing consumer-to-consumer shopping and providing support for the logistics infrastructure, which Alibaba lacks.
"JD was competing with Alibaba . . . however the scale was too small," Bryan Wang, a Beijing-based vice president with Forrester Research, said. "But now with the WeChat platform that's a game changer."
