Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
The world’s biggest global retailer now has a bigger base in China.
Wal-Mart Stores Inc., the world’s biggest retailer, is one step closer to having a bigger presence in China, home to one of the world’s fastest growing e-retail markets.
Wal-Mart, No. 4 in the 2012 Internet Retailer Top 500, has received preliminary approval from the Chinese Ministry of Commerce in the People’s Republic of China to acquire a 51% stake in Yihaodian, a Chinese mass merchant site with annual sales in excess of $130 million.
Wal-Mart announced in February plans to increase its stake in Yihaodian, which launched in 2008 and today carries more than 180,000 products across categories such as consumer electronics, apparel and groceries. Terms of the deal weren’t disclosed. The final transaction will be subject to further regulatory approvals and other closing conditions, a Wal-Mart spokesman says. “Wal-Mart appreciates the support and cooperation that it has received to date for the proposed investment from government bodies, business partners, e-commerce and retail industry experts, media and our customers,” a Wal-Mart spokesman says.
Wal-Mart says its additional investment in Yihaodian demonstrates the retailer’s commitment to growing e-commerce in China. Yihaodian operates distribution centers in five cities and focuses on same-day and next-day delivery of everyday goods, Wal-Mart says. “Wal-Mart is committed to the development of our e-commerce business in China,” the spokesman says. “We are impressed with Yihaodian’s strong management team and pleased with our investment.”
Wal-Mart first invested in Yihaodian in May 2011, but did not disclose how much of a stake it bought at that time. It has operated retail stores in China since 1996, and today has 370 stores in 140 cities. Wal-Mart says that Yihaodian is especially strong in online sales of food items, baby products, consumer electronics and apparel.
The Chinese company employs more than 4,000 workers and offers next-day delivery of what the U.S. retailer calls essential daily items. “Wal-Mart and Yihaodian will continue to work hard to bring the best shopping experience to Chinese customers,” Wal-Mart says.
China’s ministry of commerce reported last month that business-to-consumer web sales in 2011 totaled 782.56 billion yuan ($123.07 billion), a 53.7% increase from the prior year, and that e-commerce accounted for 4.3% of total retail sales. By comparison, e-retail in the U.S. grew 16.1% in 2011 to $194.3 billion and accounted for 4.6% of all retail sales, according to the U.S. Department of Commerce.