WAL-MART Sells Shop 1 To Liu Qiangdong, Who Is The Last Big BOSS?

The rumor that fermented for four days was finally fulfilled.

The purchase of shop No. 1 from WAL-MART is also the fourth equity change since the 1 shop was founded in 2008.

On the morning of June 21st, WAL-MART and Jingdong jointly announced that the two sides reached a series of in-depth strategic cooperation. As part of the agreement, WAL-MART will receive about 145 million shares of class a common stock issued by Jingdong, about 5% of the total number of shares issued by Jingdong.

As of press release, Jingdong shares rose 6%, while WAL-MART rose slightly less than 1%.

As the two sides did not disclose the price of WAL-MART's purchase of Jingdong stock, the price of shop No. 1 and the above cooperation can not be accurately calculated. If the price of Jingdong's current share price is 21.5 US dollars, WAL-MART will own 5% of Jingdong shares, which is worth about 3 billion 116 million yuan (about 20 billion 600 million yuan).

According to the agreement, the two sides will cooperate in a number of strategic areas, including the following four aspects:

First, Jingdong will own the main assets of mall 1, including the brand, website and App of "shop No. 1".

WAL-MART will continue to operate Shop No. 1 and operate in the 1 mall.

Two, the Sam member store will open an official flagship store on the Jingdong platform; the Jingdong logistics warehousing system will reach 600 million users on the day / next day, and the Sam member store will use Jingdong's warehousing and distribution integrated logistics service, so that it can promote its import products in a wider range in China.

Three, Jingdong and WAL-MART will be in

The end will expand cooperation, including expanding the richness of imported products.

Four, WAL-MART's entity stores in China will access Jingdong's investment crowdsourcing logistics platform "dada" and O2O e-commerce platform "Jingdong home" and become its key partners.

The key points of this cooperation are mutual needs and complementary advantages.

From WAL-MART's point of view, since the 1 holding shop was held in 2012, the two sides' integration is not smooth. The market has repeatedly heard that WAL-MART will sell No. 1 shop.

A former WAL-MART employee gave the analysis that WAL-MART's performance should be good after taking over shop No. 1, according to a former employee of No. 1 shop, until 2014, the sales volume of shop No. 1 was still growing, because there were many WAL-MART managers who used to jump over the past in the 1 shop. However, WAL-MART was using entity chain thinking to manage and manage an e-commerce company.

After the increase in 2012 as a major shareholder, WAL-MART did not interfere with the decision of shop No. 1, and only sent two vice presidents to the two departments of Finance and personnel.

But the number 1 shop staff told the interface news before that, after the acquisition, WAL-MART, known for its rigorous and control costs, had a rigorous assessment of gross margin and commodity safety indicators on the company's assessment indicators. This is currently incompatible with the environment in which domestic electricity providers burn large amounts of money to provide quality services, and the funds for draining are also decreasing.

While reducing the platform business, WAL-MART is still trying to integrate more deeply with the No. 1 store in terms of commodities and supply chain.

In November last year, Sam's member store entered the No. 1 shop for the first time, and nearly 400 items were sold on line. It was mainly imported from Sam and its own brand member Member (sMark). The distribution range was mainly in Jiangsu, Zhejiang and Shanghai, which coincide with the distribution advantages of No. 1 shop in East China.

This year, shop No. 1 has also launched the WAL-MART global sourcing office's products for its purchase, such as "Equate", "Avalon" and "Springvalley", which are WAL-MART's own brand of cosmetics, hair products and health products. These products are all suppliers from WAL-MART for many years.

Even so, it was far away from WAL-MART's acquisition of shop No. 1 when it was thought that "category sharing and storage sharing" were still far away.

In early June of this year, WAL-MART announced the decision to change China's team, which is related to the expectations of the US headquarters for China. (China's business is WAL-MART's fourth largest business in the world and its performance is located in Canada, Mexico and Britain). So WAL-MART gave up the 1 one shop almost without suspense.

For Jingdong, the advantage of shop No. 1 is exactly what it needs.

Hansen, general manager of supply chain, Huang Gang, said that from the category, department stores are just one area of Jingdong's demand. In the whole category strategy, Jingdong needs to take the category of department stores, and the advantage of department store is that 1 stores are just missing.

It is of great strategic significance for Jingdong to win the big market.

From the regional perspective, East China is the Jingdong's hidden secret. Jingdong lives in Beijing, but East China.

It is urgent to consolidate and shop No. 1 has been ploughing for many years in East China.

Jingdong will take the WAL-MART passenger flow to the "Jingdong home" when taking over the No. 1 store, which is similar to the previous cooperation with Yonghui.

Last August 10th, Jingdong strategic stake in Yonghui supermarket (4.030, -0.02, -0.49%), the day Yonghui supermarket limit, after the completion of the paction, Jingdong will hold 10% of Yonghui supermarket shares, and has the right to nominate two directors (including an independent director) of Yonghui supermarket board.

On the one hand, Jingdong has acquired the resources of WAL-MART, which has absolute advantages in Southern China. On the other hand, WAL-MART has found more exports for its products in the northern market, and has made online business in third ways.

A former WAL-MART employee commented: on the retail platform, Ali + Suning, Jingdong + Yonghui + WAL-MART, there is no longer a rising star.

About the change of stock ownership in shop No. 1:

2008

Yu Gang and his colleagues in DELL founded Liu Junling shop 1, and received 20 million yuan financing.

May 2010

Ping An contributed 80 million and bought 1 stake in shop No. 80%.

May 2011

Ping An will sell the 20% stake to WAL-MART for 65 million dollars.

At the same time, WAL-MART has invested in the equity incentive agreement signed by the No. 1 store management team and Ping An group.

Before the announcement, Liu Qiangdong revealed that in fact, WAL-MART had negotiated with Jingdong, which lasted for more than half a year, and the valuation has been settled. The only thing that can not be reached is WAL-MART's request to hold Jingdong mall until the whole purchase.

October 2012

WAL-MART officially announced holding 1 shop instead of Ping An to become a major shareholder in the 1 store with a shareholding ratio of about 51%.

According to sources, after WAL-MART increased its capital, Ping An Group held a 36.9% stake in shop No. 1, holding 11.8% stake in the management group.

As for the shareholding structure, we have just told the outside world, "we don't have so many shares."

July 2015

WAL-MART bought the remaining shares in No. 1 store and realized all - capital holdings.

June 2016

Shares in shop No. 1 are pferred from WAL-MART to Jingdong.