Southern Metropolitan News, 9/09/11
An industry source said today that the Ping An Insurance Group had sold a 20% stake in Shanghai-based B2C e-commerce website Yihaodian to Wal-Mart for USD 65 mln. After integrating its services with the website, Wal-Mart could attempt to acquire Yihaodian outright. Ping An acquired an 80% stake in Yihaodian for RMB 80 mln in cash in May 2010.
Yihaodian chairman Yu Gang denied the rumor. "We have never mentioned the possibility of an acquisition. Our funds far exceed the amount reported, and the proportion of shares was also misreported. You could say that Wal-Mart has made a strategic investment, and will not participate in the operation of Yihaodian."
A recently departed Yihaodian employee said that Gu Bo, former director of Yihaodian's apparel, shoes, and accessories division, had left the company for Taobao, and that the site's director of finances had also left - along with another four of the site's eight division directors. Wal-Mart has already sent two senior executives to sit on the Yihaodian board, the source said. While Wal-Mart will reportedly integrate its e-commerce division with Yihaodian, the source said that the company was bringing in e-commerce executives from Hong Kong and Taiwan with little understanding of the Mainland China market, and paying them five to six times local e-commerce salaries.
An Yihaodian spokesperson declined to comment on the report of executives resigning, citing a confidentiality agreement, saying only that Yihaodian did not have the position of department director. The spokesperson added that the company had grown from 40 employees at its founding to more than 3,600 at present, and that staffing changes were normal for a company of its size.
Yu Gang said that Ping An, Wal-Mart, and Yihaodian's founders were the main shareholders of the company at present, but declined to reveal how many seats on the board or shares each had.
Editor's Note: For more information on this topic, please see "Wal-Mart Acquires Minority Stake in Yihaodian," MD 5/16/11 issue.