beyondbrics

China’s rapidly expanding e-commerce market has caught the attention of Walmart, the world’s largest retailer. Walmart has is one of six companies investing a total of $500m in 360buy.com, reportedly China’s largest online seller of consumer electronics. Walmart’s individual investment has not been made public.

Walmart, which will have around 300 stores in China when it completes its takeover of the Trustmart chain, entered the country’s e-commerce business on its own account last month. It launched www.samsclub.cn, linked to the handful of Sam’s Club discount warehouses that it operates in southern China.  

The Sam’s Club site is the first to be rolled out using a new global e-commerce platform that has been under development at Walmart’s digital headquarters in San Francisco for over two years. So it would be relatively easy for the retailer to follow up with a Walmart – or Trustmart – branded parallel site, after ironing out any glitches under the smaller Sam’s Club business. Distribution, however, represents a larger challenge.

But the investment in 360buy.com also suggests that the retailer sees potential for a repeat of the kind of mutually beneficial partnerships it has developed with digital businesses in the US. Since 2008, it has been working with 1-800-Contacts, the largest online contact lens business, in a deal that involved shifting its own online and in-store contact lens business over to its partner, and sharing costs. It is also a minority investor in Green Dot, an internet based payment and financial service, that it uses to support its pre-paid store payment cards.

The CEO of 360buy.com reportedly told a news conference last week that the company wants to invest the $500m raised in new distribution centres – while Walmart is very interested in the in-store pick-up model it has developed in the US for online orders. So perhaps one day a Chinese consumer could shop on 360buy.com and pick the item up at the local Walmart? Or 360buy could fulfill online electronics orders for Walmart.com in China?

In the bricks-and-mortar world, the retailer now generally prefers to form partnerships with local partners when entering a new market – as it has done recently in Central America and Chile, and as it plans to do in South Africa with its ongoing Massmart deal. With Alibaba’s Taobao, Amazon’s Joyo.com and others already established in China’s online market, it looks like Walmart has opted for another local ally.

Related reading:
Walmart slims down stores for China, FT (Dec. 1)
Walmart bows out of Russia, beyondbrics (Dec. 13)
Tremendous growth for Walmart overseas, beyondbrics (Oct. 13)