Yihaodian had a simple bricks-and-mortar to internet model when it started out in 2009. Its founders Gang Yu and Junling Liu pasted posters of grocery store shelves on walls. Then they invited passers-by to scan them in and order them on mobiles.
Walmart first invested in Yihaodian is 2011 and had a controlling interest of 51% by 2012. Penetration was slow, so it just bought the founders out and fired them according to Forbes. The big question is what happens next?
Will Walmart Succeed with Yihaodian Where Others Failed?
Walmart has built a reputation for market dominance by slashing costs, providing service and offering value. Whether this will enable it to compete with established Chinese firms on the Yihaodian platform is an open question. EBay, Expedia, Google and Yahoo have all failed to dominate mobile marketing in China. It will be interesting to see what Sam Walton’s successors make of the opportunity to increase Chinese market share from a dismal 1%.
Walmart Hiding Behind a Wall of Secrecy
Walmart’s Asia head of e-commerce Wang Lu is adding Yihaodian to his stable of responsibilities. Pundits expect him to request significant funding to boost the platform’s online-to-offline presence. We shall no doubt see more repro Wallmarts on subway walls. But will Chinese consumers trust the images sufficiently to order lounge suites there?
Could Walmart Become More Hands Off?
Both Amazon and Walmart like to own their outlets, and this brand strategy extends to virtual sales. Their Chinese rivals revel in a plethora of affiliate sellers, and sacrifice quality control over them for a greater take. The American giant clearly has its work cut out as it tries to reshape its Asian Market. It remains to be seen whether flying solo without Yihaodian‘s founders Gang Yu and Junling Liu will turn out to be a blessing, or a curse for struggling Yihaodian.