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Walmart, the U.S. retail giant and once the largest shareholder in JD.com, has sold its entire stake in the Chinese e-commerce company, exiting an eight-year investment valued at approximately $3.74 billion. The decision, confirmed by a source familiar with the matter, underscores Walmart’s strategic pivot to concentrate on its operations in China, particularly its warehouse business.
Walmart first became a major shareholder in JD.com in 2016 when it sold its online grocery platform Yihaodian to JD in exchange for a 5% stake, worth around $1.5 billion at the time. Since then, Walmart’s involvement has been a key aspect of its China strategy. However, intense price competition and waning consumer demand have made the e-commerce sector less attractive to investors, with JD.com’s stock falling nearly 70% from its peak in early 2021.
The company reported a 17.7% year-on-year rise in revenue from its China operations in the latest quarter, driven by strong growth in Sam’s Club and an expanding digital presence. Currently, Walmart operates 48 Sam’s Club locations across China, and membership income from the business surged by 26% during the same period.
The sale of 144.5 million American depositary shares of JD.com, priced between $24.85 and $25.85 per share, reflects the broader challenges in China’s retail sector, which has been impacted by the property market slowdown and declining consumer confidence. JD.com itself has responded to the shifting landscape by implementing a $3 billion buyback plan, repurchasing $390 million worth of shares.
Walmart’s decision to exit JD.com signals a clear shift in focus towards bolstering its brick-and-mortar and digital infrastructure within China as the e-commerce industry grapples with tighter margins and fierce competition. Despite the divestment, both companies expressed optimism for continued collaboration in areas like data sharing and logistics.