Walmart mulls $1.2-bln investment in China as trade tension de-escalates

Continuing the efforts to bring innovation in its business and stay relevant in rapidly changing retail industry, Walmart (WMT) this week announced a significant investment in China as part of ramping up its logistics services. In a move that complements its growing interest in Asia, the department store operator recently had struck deals with business tie-ups in India for entrepreneurial talent acquisition.

According to a statement published by the company on social media, it plans is to invest approximately $1.2 billion in China, which includes the opening of around ten logistics centers. Through the initiative, Walmart intends to join Chinese technology and e-commerce companies like Alibaba (BABA) and Tencent in combining the operations of its brick-and-mortar and e-commerce businesses.

Interestingly, Walmart’s announcement about the measures to expand the China business comes on the heels of the US and China reaching a trade war truce at the G8 summit in Japan. Probably the company is being extra cautious after the unpleasant experience in India where its ambitious tie-up with local e-tailer Flipkart suffered a setback recently, due to regulatory issues.

The company plans to invest approximately $1.2 billion in China, which includes the opening of around ten logistics centers

Of late, China’s retail industry has been witnessing a drastic transformation that is being referred to as “smart retail.” European retailers such as Carrefour are busy revising their business models to adapt to the changing market scenario in China.

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Having launched its China operations more than two decades ago, Walmart has a significant presence in the local market, with dozens of stores and a Global Sourcing Center. The partnership with local e-commerce company JD.com (JD) a few years ago was a major milestone in for the company’s China operation.

After surging to an all-time high last month, Walmart shares traded slightly lower during Monday’s regular session. The stock gained 18% so far this year and 31% in the past twelve months

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