American retail giant Walmart Stores Inc. has increased its stake in JD.com Inc., going from 10.8% to 12.1% or 289.1 million shares, according to a latest securities filing.
The Arkansas-based supermarket has been trying to ramp up its stake in the Chinese e-commerce market, currently under Alibaba Group’s dominion. Walmart hopes to gain more traction in China, where it owns around 400 physical stores.
In June 2016, Walmart took an initial 5.9% stake when it sold its Chinese e-commerce business to JD.com in exchange for that initial stake, valued at around $1.5 billion.
The deal included Walmart signing over ownership of its Chinese online marketplace, Yihaodian, including the brand name and website, to JD.com in exchange.
A large part of JD.com revenues come from the sales of self-owned inventory. The e-tailer’s logistics network has also helped win more users through fast shipping, making it much like Amazon Inc, and an appealing target for Walmart.
In November, JD.com said third-quarter revenues grew 38% from a year ago, slightly ahead of analysts’ expectations. It predicts fourth quarter revenue of 75-77.5 billion yuan, similar to last quarter’s near 40% growth rate.
As well as the JD.com stake, Walmart announced last U.S retailer had made a $50 million investment in Chinese online grocery and delivery firm New Dada, as part of its strategy to extend its tie-ups with local online players to help boost sales in China.