The deal will help Wal-Mart gain customers in China and logistics expertise, Euan Reillie of BDA Partners tells Reuters' Fred Katayama.
Wal-Mart is selling its Chinese e-commerce business to JB dot com sending eighty yards and JD sharply higher. Let's explore further in the steel we're joined by UN rally he is. Senior managing director at BV partners while you lifted up so how does selling. It's e-commerce business which is called you know beyond to the Chinese company GA dot com constant help Wal-Mart in. This in itself in time we'll festival. Fred Wilma was really struggling to get he Comas rights in China. Actually arguably is struggling to get the physical stools right. It's clearly a cutthroat market. Overall market growth has shrunk down to five or 6%. And it's just a wildly competitive market as well to local retailers grocery stores and getting into a coma us. And I think Wal-Mart figured out quite wisely that he couldn't win by itself. Right it wasn't just on the online side but also on the brick and mortar side also had a lot of problems. In China. Does the sale comes surprise you given that Wal-Mart had just recently taking full control. On this not not a huge surprise to tell you the truth has been a lot of cheap capital in China. Being thrown these various different IE Comas platforms. And I think frankly by teaming up with. JD. That probably gives will model had a chance to succeed of rule in the long and how so you what does it Wal-Mart get out of so inconvenient truth the festival JD has a lot of customers. And this is a battle for market. (%expletive) that. Just like in the US what we've seen Amazon couldn't win and it really squeezes out. Most of the competition. Makes it very hard for anyone else to win actually that's not a huge surprise for wool mart which is gone the same thing and physical retail in the US. In that in an increasingly transparent and open and aggressive. Competitive market the big guy wins and a woman has to find ways to be the biggest guy. So again so just more customers or anything else advocates object I think customers as the first thing the second thing is that JD. Because of this existing scandal has very strong. And high quality high quality logistics. Funnily enough. Wool mart had spent some money on some effort to improve yet again this logistics platform. But again just you need scale to deliver within two is to any customer and a second. Austin tea Chinese city and a Wal-Mart cannot do that. When it's aligned with with JD. And you know how does GD dot com benefit from this deal as it takes on the big giant Ali while. Well of course Alibaba is the guy that everybody has to fight against. I think the salons JD to align itself was one of the most sophisticated retailers globally. And I think that's a reputation will benefit every Chinese invest. Every sophisticated Chinese customer knows who will monitor is. And is about wal mart's. Role in the most developed market in the world. And I think it really helps you AD position itself as a differentiated. Sophisticated plan. ADR certainly rising sharply. Is that a good deal from both sides I think in the long time this will prove to be a really good deal for JD and maybe the deal that Wal-Mart had to do. Will what was actually rather shockingly seeing declines. In China in some parts of its business so this is a kind of a rescue. Four Wilma it was a tough decision for war month to take but I think the right one I think slide again for joining us their thoughts. Our thanks to you really don't deviate partners I'm Fred Katayama of this is noise.