Wal-Mart Stores Inc. is changing strategies in China, to reach an agreement to forge an alliance with one of the biggest e-commerce players in the country rather than continue trying to enter the fast-growing market, but competition itself same.
Wal-Mart in China
Wal-Mart said Monday it will sell its website Yihaodian to JD.com Inc., the second largest online retailer in China, after the US Alibaba Group Holding Ltd. Wal-Mart will receive a 5% stake in JD.com , valued at approximately $ 1.5 billion at recent prices, and access to the network and delivering JD.com buyers.
JD.com American Depository shares rose 4.6% to $ 21.06 on the Nasdaq Stock Market amid the news, which was previously reported by The Wall Street Journal. Shares of Wal-Mart rose slightly to $ 71.10 on the New York Stock Exchange.
Chinese retail landscape has become fierce as the economy slows and consumer buying behavior moves online and for purchases of mobile phones much faster than in the United States and Alibaba JD.com are fighting for customers , promising delivery in less than an hour in some cities and pushing in rural villages.
Wal-Mart has struggled to expand in the country, although it receives about a third of its US $ 482.1 million in annual sales outside the US The chain opened its first store in China in 1996, but only has about 430 there today, or one tenth more than in the US traffic Chinese foot Wal-Mart has fallen for nine consecutive quarters, although spending per trip is increasing.
Yihaodian
The retailer first invested in Yihaodian in 2012 and took full control of the company last year. The website has built a niche in grocery sales, but represents only 1.5% of the market of electronic commerce retail China, according to consultancy iResearch. JD.com and Alibaba together command about 80% of the market.
"We have seen that high quality US retailers are going to China and not be so successful," said Charlie O'Shea, retail analyst at Moody lead. Union with JD.com "gives Wal-Mart a recess in China, it will be difficult to do it on your own," he said.
The sale allows Wal-Mart to increase rapidly to online sales nationwide in China, said Dan Toporek, a spokesman. Yihaodian is strong in southern and eastern China, he said, but JD.com "greatly expands our reach to a much broader set of customers in China and also provides a physical network for delivery."
As part of the agreement, Wal-Mart is giving up its right to initiate a new Chinese website, but can still run your applications and local websites Club of Wal-Mart and SAM'S, according to financial documents. The company expects the transaction will increase the benefit by a range of 16 cents to 19 cents per share in the current quarter.
Wal-Mart said in July last year that it had taken full control of Yihaodian of its minority partner, paying $ 760 million for the 49% stake it did not own. Wal-Mart executives have said they want to move faster to grab a market of online shopping and growing Chinese mobile larger piece, slowing the growth of its store expansion in the country.
JD in China
JD.com, such as Wal-Mart, has focused on direct sales to consumers. It has sought to expand its offerings as it competes with the largest Alibaba, which operates the consumer website Taobao consumer and merchant-consumer market-Tmall. Unlike Alibaba, JD.com built largely out of their own logistics network, including dozens of stores and tens of thousands of workers delivery.
JD.com has been eroding the market share of Alibaba, and revenue growth has exceeded Alibaba over the past seven quarters. Still, its market share in selling products online to consumers is about 23%, compared with 58% of TMALL, according to consultancy iResearch.
Competition has intensified in the niche grocery Yihaodian as local retailers in China have gone online and many new companies have entered the field of selling things as diverse as imported avocados and dishwashing detergent. JD.com The agreement will help expand its selection of products imported using the supply chain Wal-Mart, Toporek, spokesman for Wal-Mart said.
JD.com has strengthened its food supply, for example, through its investment in FruitDay, a retail Chinese products online, and is expanding imports, including signing agreements with Australian companies milk and meat producers and US vegetables.
Morgan Stanley advised Wal-Mart in the last agreement, while JD.com did not have a financial advisor.
We found that consumers are generally more selective in their spending. They allocate more of their income on services and lifestyle of the half-plane more experiments to spend more on leisure and entertainment (50 percent increase in revenue at the box office last year is just an indicator of this tendency). Meanwhile, spending on food and beverages for domestic consumption is stagnant or even in decline.
Chinese consumers are increasingly trading from mass products to high-end products: we found that 50 percent are now seeking the best and most expensive offering, a significant increase over previous years
High End consumption in China !
. It is therefore not surprising that the growth of high-end segment is faster than the mass segment and value, and foreign brands still hold a leading position in this high-end market. Moreover, an increasing proportion of Chinese consumers focus on a few brands, and some are more faithful to the simple marks. The number of consumers willing to switch to a brand outside of their "short list" fell sharply. In clothing, for example, the number of consumers willing to consider a brand they had not before fallen about 40 percent in 2012 to just under 30 percent in 2015.
Be part of the closed set of the few brands that consumers consider or even a brand that consumers prefer, is increasingly difficult. Fewer consumers are open to new brands and promotions become less effective to encourage consumers to consider.
A few notable exceptions, such as the increasing share of premium-smartphone market Huawei, Chinese brands have not gained much traction in many high-end segments, such as skin care, cars, sports and fashion. This contrasts sharply with the mass market segment, where local brands are gaining market share among foreign owners by offering a much stronger proposition of the product.
In China more than anywhere else, instant chat applications are increasingly used and represent a real challenge for companies wishing to break into the digital market. With a strong head start, WeChat is the undisputed leader in China and offers to brands an efficient way to communicate. Here we will give you some insights of what this application can offer to its professional customers.
The Chinese government is very well known for its love for censorship online and offline. Throughout history China has been very sensitive on the freedom of expression: political matters, religion, and so on. The Chinese government created what we call: “The Great Firewall of China” which literally blocks any kind of foreign websites that doesn’t abide to the government’s rules. As you may already know, Facebook and Google to name only a few are forbidden in China.
The government has had a hold of Internet in China for several years now and it won’t stop sooner or later.
A 2010 basic election helped bring five ages of armed forces junta guideline and isolation to a finish in Myanmar (also called Burma). Since that time, various initiatives have been performed to reconnect the Southeast Asian country with those other entire world. Its government and tourism board are both keen to show that Myanmar’s days of forced labor and gross human rights abuse are behind it, and instead show the world the actual richly cultured nation provides: beautifully intricate architecture by means of its famed ancient pagodas and Buddhist shrines, flavorsome and exotic foods, and its own inviting and diverse people.
“ The Internet is becoming the town square for the global village of tomorrow.” Bill Gates
China, with more than 660 million of Internet users is one of the biggest web communities in the world. If you are a company looking to expand its business in China, I am sure you will greatly appreciate the following 5 digital strategies, which will ensure your success in China.
Their State Internet Information Office has been flooded with open public problems about Baidu, it said in a assertion. The problems also stated Baidu experienced leaked users’ private information state-run Xinhua information company reported. Furthermore, some serp’s on Baidu aren’t impartial or objective, and its own media route has multiply unsafe information including assault and terror.
It isn’t yet clear the type of abuse will get, but Baidu was fined more than 210,000 yuan (about $33,800) in March this past year to carry online publications without a permit and uploading pornographic books onto its app.
- See more at: http://www.chinameer.com/china-baidu-receive-strict-punishment.php#sthash.CPF6lMFT.dpuf
