Chinese e-commerce giant JD.com has teamed up with US retail titan Walmart, to combine online retail with the powers of bricks and mortar.
The companies have announced they are expanding their collaboration to further integrate their online platforms, their supply chains and customer base as well.
Chinese consumers are now able to purchase US made Walmart products directly via the JD.com online platform, and shoppers also have access to purchase over 1,700 of Walmart’s most popular products via JD.com’s retail outlets. “Walmart is also offering space in their stores for our inventory,” said JD.com global president, Winston Cheng, according to CBNC.
Physical retail stores is where Amazon and other e-commerce retailers are lagging behind, according to Cheng, who says its partnership with Walmart is already proving to be successful, with Walmart concurring.
As part of the new deal, Walmart and JD.com will develop joint supply chain and backend systems to integrate inventory management.
“Our ability to tap into JD.com’s advantages across logistics, big data, technology and customer service gives Walmart a huge advantage in reaching China’s rapidly expanding consumer class. We look forward to further bringing together our strengths in digital and physical retail to take the customer experience in China to the next level,” said Ben Hassing, senior vice president of Walmart China e-commerce and technology.
“We’re integrating with Wal-Mart in a much tighter partnership, which … potentially, Amazon might do with Whole Foods,” Cheng told CNBC.
By combining the offline inventory management for both companies and leveraging off its online customers, JD.com now has the ability to deliver purchases to consumers significantly faster – delivery time is now approximately 30 minutes.
The partnership between JD.com and Walmart began a year ago, with the deal providing benefits to both companies, including:
- JD.com facilitates online traffic to Walmart
- Walmart offers space for JD.com products on its shelves
- JD.com fulfillment centres have expanded as a result
- A vast amount of products are now available to Chinese consumers that weren’t previously easily accessible
- Walmart able to further access China’s expanding consumer class tapping into JD.com’s resources
As part of its omnichannel focus, JD.com recently setup its first JD Home store inside a Walmart store in Shenzhen, which sells electric products that complement Walmart’s product offerings nicely.
JD.com is China’s second largest e-commerce powerhouse, coming in behind Alibaba. Three years ago the company formed a headline deal with Chinese tech firm Tencent, which gave it a premium spot on Tencent’s WeChat mobile app.
“With the Tencent partnership, we bring a lot of the mobile traffic also to our customers – and with the Walmart partnership, it’s a fully-integrated online traffic to online e-commerce to offline retail strategy,” Cheng told CBNC.