Walmart Diving Deeper into China with Luckless Ecommerce Initiative

Back in August, Walmart announced that it received the approval from the MOC of China (Ministry of Commerce of China) for buying a majority stake(51%) in the Shanghai-based e-commerce company Yihaodian. The latter was also failed as the online Walmart in China (Top 10 e-commerce players, Q1 2012 with a 0.88% share) , and the purchase was thought to be a big move for Walmart to boost its online presence in China.

In its home turf, WalMart – according to its CEO McMillion – will be sharpening its focus on lower price, neighborhood market and ecommerce. He said that e-commerce is dramatically changing the way retailers operate around the world, that the consumers have been connected via mobile technology, which is turning the entire retail sector upside down. Over the past years, we did observe more and more companies got started using mobile technology to communicate with consumers, pioneers include IKEA, Uni Qlo and so on.

screenshot of Walmart China website

While on the other hand, the giant retailer’s latest scheme for China is to expand into tier 3 and tier 4 cities with medium-sized SmartChoice stores.

Ding Liguo, founder of the Topretailing.com, analyzed that “in China many Walmart regular stores locate in the downtown area, where there are already many players in this pond. It’s very tough for neighborhood market to compete with them. ” He also commented that Walmart’s China business needs to be coupled with its ecommerce business, while the fact is, the company’s ecommcer effort seemed to have been fallen apart.

Although the retailer said it have strengthened its effort on the online arm, it still needs greater care for the market was littered with dead players. Another insider Du Yan explained that, a “Neighborhood market + Ecommerce” plan for China is challenging, but Walmart has sufficient cash and mature management. “It might work for Walmart.”