Walmart partners with JD.com to launch online store in China for British supermarket chain Asda

Walmart is hoping to sell more British produce in China after launching a store on the country’s second largest online retailer JD.com, for its UK supermarket chain Asda.

The launch of the store – clearly an effort to attract more China’s middle-class shoppers, who increasingly crave quality foreign products – is the latest move after a strategic alliance between Walmart and the Beijing-based JD.com was agreed last year.

Walmart increased its own stake in JD.com to 12.1 per cent after selling its own China e-commerce operation to JD.com in exchange for a 5 per cent stake in the Chinese e-commerce major in June 2016.

“Walmart is delighted to provide JD.com’s 226 million customers access to Asda’s quality British products at competitive prices,” said Ben Hassing, senior vice president of e-commerce for Walmart China.

Asda’s primary offerings on JD.com will be food and health products, including items such as biscuits, coffee, tea bags, nuts, energy bars, and baby food.

Hassing said the companies expect the initial selection of products to significantly expand in the months and years ahead.

Using online channels is increasingly seen as a critical strategy for foreign retailors to gain access to China’s growing middle-classes, who are often young, tech-savvy and keen on foreign products which they regard as safer and higher quality than domestic counterparts.

A number of foreign supermarket chains, including the UK’s Sainsbury’s and Germany’s Aldi, have already launched online stores on e-commerce sites run by Alibaba Group.

Alibaba and JD.com are competing head-to-head on prices and quicker delivery times to attract traditional supermarket goers to shop online for fast-moving consumer goods – such as groceries, shampoo and bathroom tissues – to lure shoppers on their sites.

But some experts remain sceptical on the actual sales performance of foreign supermarket-sold goods in China.

“Selling foreign supermarket products online is a nice touch to enrich the two platforms’ online offerings. But I don’t think foreign supermarkets can create significant sales in China via this cross-border shopping model,” Lu Zhenwang, CEO of the Shanghai-based Wanqing Consultancy.

“Compared with their rich selections in home markets, there is only a limited number of items that are suitable to ship to Chinese shoppers.”

Market research firm eMarketer predicts that China’s overseas online shopping sector will be worth $157.7 billion by 2020, from about $86 billion last year.

Alibaba owns the South China Morning Post.