Walmart to sell off Chinese venture Yihodian to rival

Walmart, the world's largest retailer, plans to sell off its Chinese online grocery business, Yihaodian, to Chinese rival in exchange or a stake in it.

Beijing-based is China's second largest e-commerce company, and had reported a profit of $28 billion profit in 2015. The $1.5-billion deal would see Walmart take a 5-per cent stake in in exchange for Yihaodian, China's largest online retailer specialising in groceries.

Walmart's move comes as western companies like Apple are making more aggressive approaches into the Chinese market. E-commerce, is particularly big  ticket in the country with industry leader Alibaba grossing over $14 billion in revenue in just one day last November.

Yihaodian was started in 2008 by former Dell China executives in the days of the tech boom in the country that saw the rise of companies like Alibaba, Baidu  and TenCent. Walmart bought Yihaodian in 2015 after first investing in it in 2012.

Walmart said in a statement that the decision to sell Yihaodian was purely strategic.

"We're excited about teaming up with such a strong leader in, and the potential that this new relationship creates for customers in China, as well as for our businesses," said McMillon.

Walmart would also become a ''preferred seller'' on one of JD's grocery delivery apps, while Sam's Club would open a store on JD's flagship e-commerce site.

The deal doesn't mark the conclusion of Walmart in China, which remained a ''strategic market'' for the future, McMillon said recently.

Walmart now has 430 outlets across the country, but the retailer had been hit with issues ranging from shoddy accounting to food safety scandals. One case also involved the sale of fox meat labeled as donkey meat.