Walmart’s move was made possible by the Chinese government’s recent decision to open the e-commerce market to more foreign investment. Last month, a Chinese regulator removed restrictions that barred foreign investors from taking a 100 percent stake in any e-commerce operation in the country. Before that, foreign investors such as Walmart had to enter into joint ventures with local Chinese players.
Although Walmart’s move could help the U.S. company tap the vast Chinese market, gaining ground against the existing competition will be tough. Other U.S. e-commerce players such as Amazon.com and eBay have all struggled to compete with Alibaba Group, the country’s leading online retailer.
In China, Alibaba’s Tmall.com site has a 60 percent market share, according to Beijing-based research firm Analysys International. Amazon and Walmart’s Yihaodian site, however, each have about a 1 percent share.
In spite of Alibaba’s dominance, Walmart’s Yihaodian site has been making gradual progress. It now has 100 million registered users, up from only 4 million back in 2010. Walmart’s goal is to now integrate their physical stores with Yihaodian’s mobile and online services for a better shopping experience.
