Walmart Gains Approval to Control Online Supermarket
The Chinese Government gave Walmart Stores Inc. to push through their plans to gain control of a local online supermarket with several conditions that the deal made will not hinder outside competition.
The approval came after the U.S. retail giant announced a deal that will increase its investments in a holding company Yihaodian a Chinese e-commerce website to 51 percent last February. The Ministry of Commerce released a statement saying that they approved an increase Wal-Mart stake of the holding company to 51 percent from the previous 17.7 percent. But several concerns were expressed on the possible exclusions or restrictions on competitions in China value added telecommunication service market so the ministry included several conditions in the agreement.
Such conditions states that any acquired business cannot use its online platform to give internet services to other parties and will limit itself to online retailing. Established in 2008, Yihaodian offer value added services along with selling products ranging from food, consumer electronics and food. As of May 2011, Yihaodian already has 18 million registered users and sales exceeding 800 million yuan.
More than 200 million Chinese people are shopping online and china projected to become the largest e-commerce market in the world by 2015.