China: Walmart and JD.com invest US$500M in online grocery delivery firm

August 13 , 2018

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China: Walmart and JD.com invest US$500M in online grocery delivery firm

Chinese online grocery and delivery firm Dada-JD Daojia said last week it had raised US$500 million from Walmart and JD.com in its latest round of financing, news agency Reuters reported.

The company comprises of two businesses and is partly owned by JD.com - in which Google in June said it would invest US$550 million.

Dada operates a network of 5 million delivery men, while JD Daojia partners with retail stores and provides one-hour delivery services of groceries and other items, Reuters reported.

Walmart said it invested about US$320 million in the latest fundraising. The Arkansas-based company’s partnership with Dada-JD Daojia dates back to 2016 when it invested US$50 million, the company said, adding that at present, 200 Walmart stores in 30 major Chinese cities have a presence in JD Daojia.

“We are confident that this deeper collaboration with Dada-JD Daojia will enhance our omni-channel footprint and deliver a better O2O (online to offline) customer experience,” said Wern-Yuen Tan, president and CEO for Walmart China.

The global retail giant has been pushing to integrate its retail network in China with the country’s burgeoning “smart retail” movement, as retailers and tech giants such as Alibaba Group Holding Ltd and Tencent Holdings Ltd cut deals to combine shoppers’ online and offline experience.

The movement involves removing the barriers between online and offline shopping and allows consumers to have groceries delivered within a very short time from placing the order.

Earlier this year, Walmart said it opened its first small-sized high-tech supermarket in the southern city of Shenzhen, which will stock products that customers will also be able to buy on the U.S. retailer’s store on JD Daojia. The stores are competing with Alibaba’s Hema to provide fast delivery of grocery to customers.