On Wednesday, according to a report from Xinhua News Agency, Wal-Mart Stores Inc. (NYSE: WMT) announced that it is teaming up with Alibaba Group Ltd. (NYSE: BABA) to start accepting Alipay mobile payments in south China stores.
According to the retail company, in the southern city of Shenzhen, 25 of the U.S. retailer’s stores can now offer customers the option to pay for their purchases using the mobile payment Alibaba app, and soon, more than 400 Chinese Wal-Mart stores will join the program.
Despite Wal-Mart’s small growth in China which was evident from their earnings results from Q4 of 2014, it still plans to extend its operations in that country. In fact, last month Wal-Mart (WMT, +0.72%) said that it plans to open an additional 115 China stores by 2017.
Adding to this, Wal-Mart will now be going head-to-head with Amazon.com in their hope to build their share of the e-commerce market share. They are hoping to do this by offering an Amazon Prime-like service at half the price. Through Wal-Mart’s own ecommerce website, the company, through a “closed beta” test in a limited market, will send out some invitations this summer offering unlimited free shipping for 3 days or less for only $50 a year, said Ravi Jariwala the company’s spokesman.
Jariwala further added that subjected to this service are more that 1 million best-sellers of Walmart.com’s stock of more than 7 million items. These products span across many categories including, toys, electronics, video games and home products. He also said that this service is being offered because Wal-Mart heard that customers want affordable and predictable shipping.
This service is being offered after the company’s global online sales target was not achieved last year, increasing a disappointing 22% to $12.2 billion, compared to the 30% rise the year before. Many analysts have questioned Wal-Mart’s multi-channel strategy as mobile and online spending still remains a key part of the company’s investment spending.
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