Wal-Mart takes control of online retailer Yihaodian

Wal-Mart Stores Inc has become the controlling shareholder of Yihaodian and plans to reveal details of the deal around Friday, Wal-Mart told the Global Times Tuesday.

Analysts say the move may turn the Shanghai-based online superstore into China's online Wal-Mart.

After receiving conditional approval from the Anti-Monopoly Bureau of the Ministry of Commerce (MOC) on August 13, Wal-Mart raised its stake in Yihaodian to 51.3 percent by buying a 33.6 percent stake from Yihaodian parent Newheight Corp, giving the US leading retailer controlling shares in the company.

Li Ling, spokesperson of Wal-Mart China, confirmed to the Global Times Tuesday about the transaction but refused to make any comments on whether Wal-Mart will launch its own e-commerce platform in China.

At a Chinese retail industry summit Friday, Liao Honghui, vice president of Wal-Mart China, said that Wal-Mart intends to start its e-commerce platform in China soon and is optimistic about China's e-commerce sector.

Experts said that Liao was likely referring to Yihaodian, which the MOC has allowed Wal-Mart to control on the condition that Yihaodian can no longer host third-party transactions due to monopoly concerns.

Media reports said that Yihaodian has already spun off subdivisions, like 1mall.com, that provide third-party transactions, and 1mall.com is now run by Shanghai Chuanji E-commerce Co.

A 1mall.com staffer told the Global Times Tuesday on condition of anonymity that 1mall.com has been operated separately from Yihaodian since October 1.

"Though Yihaodian may lose its name as it may becomes known as China's online Wal-Mart, it still benefits a lot, as Wal-Mart's worldwide supply chain will be a powerful backup for this platform," Feng Lin, a B2C analyst from China Electronic Business Network, told the Global Times Tuesday.

"This supply chain will give Yihaodian a price advantage, which is very important in competing with other Chinese e-commerce platforms like taobao.com," said Feng.

According to data released by Internet research firm Analysys International on October 16, China witnessed 45 percent growth year-on-year in the e-commerce industry during the second quarter.

The transaction volume reached 278.84 billion yuan ($44.5 billion), with Alibaba Group's taobao.com seizing 76 percent of the market while Yihaodian captured 0.3 percent, according to Analysys International.