Executive Briefings

Wal-Mart Stores to Enter China's E-Commerce Space

China's retailers, already struggling because of an economic slowdown, got another jolt of bad news when Wal-Mart Stores announced recently it had finally received Chinese government approval for a proposal to buy a majority stake in Yihaodian, a Shanghai company that is a leader in the country's booming online retail industry.

The deal suddenly puts Wal-Mart at the center of one of China's fastest-growing sectors. China's economy is slowing because of fallout from the European debt crisis, but that's not deterring Chinese consumers from making more purchases via the internet. According to the official Xinhua news agency, 210 million Chinese are shopping online. The value of online shopping transactions in China jumped 51.6 percent year on year, to 268.4 billion yuan, in the second quarter of 2012, Xinhua reported, citing iResearch, a market research firm with offices in China and Silicon Valley.

It wasn't that long ago that China was a laggard in e-commerce. In 2008, e-commerce amounted to only 2 percent of total retail sales in China, according to Shanghai's RedTech Advisors.

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The deal suddenly puts Wal-Mart at the center of one of China's fastest-growing sectors. China's economy is slowing because of fallout from the European debt crisis, but that's not deterring Chinese consumers from making more purchases via the internet. According to the official Xinhua news agency, 210 million Chinese are shopping online. The value of online shopping transactions in China jumped 51.6 percent year on year, to 268.4 billion yuan, in the second quarter of 2012, Xinhua reported, citing iResearch, a market research firm with offices in China and Silicon Valley.

It wasn't that long ago that China was a laggard in e-commerce. In 2008, e-commerce amounted to only 2 percent of total retail sales in China, according to Shanghai's RedTech Advisors.

Read Full Article