Wal-Mart will transfer its online Yihaodian operations in China to JD.com in exchange for a stake in the Chinese e-commerce giant in an alliance announced Monday.
Under the deal, JD.com will take ownership from Wal-Mart Stores of the Yihaodian brand, website and app. Wal-Mart will continue to run the Yihaodian direct sales business.
In exchange, Wal-Mart will receive nearly 145 million new JD.com shares, equivalent to about five percent of the Chinese company, China's second-largest online retailer after Alibaba.
Yihaodian has a strong presence in eastern and southern China and offers food and beverages, home goods and electronics. It had more than 100 million registered customers in July 2015, according to a Wal-Mart factsheet.
The deal is expected to benefit Wal-Mart by offering it exposure to other parts of China where Yihaodian is less known. JD.com will be able to offer more imported goods to the world's second biggest economy from Wal-Mart global distribution chain.
Wal-Mart's Sam's Club China also plans to open a flagship store on JD.com.
"We are very happy to announce this landmark agreement between two leading retailers, which we are confident will help bring e-commerce in China to the next level and benefit millions of consumers," said JD.com chief executive Richard Liu.
"Yihaodian will continue offering the outstanding user experience its customers have come to expect, which we will further augment by leveraging our unparallelled logistics capabilities and breadth of product categories."
"We're excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China, as well as for our businesses," said Wal-Mart chief executive Doug McMillon.
In midday trade, Wal-Mart shares rose 0.5 percent to $71.29, while JD.com surged 7.9 percent to $21.72.