It turns out that Walmart (NYSE:WMT) is a big player in China's logistics sector. The big U.S. retailer has disclosed in a regulatory filing that it now holds nearly 95 million shares of Dada Nexus Limited (NASDAQ:DADA), a very recent arrival to the stock exchange. That holding equates to a 10.7% stake in the company and is worth over $2 billion.
Walmart and Dada have a history that predates this revelation. Walmart started to invest in Dada Nexus in 2016, and was a key investor by the time its initial public offering (IPO) rolled around earlier this month. The two companies are partners in China, where Dada Nexus provides delivery services for Walmart goods. In Dada Nexus' most recently reported quarter, almost 15% of total net revenue came from this partnership.
Dada Nexus likes its tie-ups. Just before the IPO, it disclosed that powerful Chinese e-tailer JD Group held more than 51% of its equity. As with Walmart, Dada Nexus partners with JD Group on logistics services.
Over the past few years, Walmart has been an active investor in retail-related businesses abroad. In 2018 it reached deep into its coffers to buy 77% of Indian e-commerce company Flipkart, beating a rival attempt by Amazon.com.
In spite of a recent dip, Dada Nexus' stock has been a hit among investors in a market that is still starved for IPOs. Walmart's disclosure should help maintain interest in its fortunes.
In late morning trading on Friday, however, Dada Nexus's stock was down by almost 3.4% while the broader equities market was in positive territory. Walmart's shares were up by just over 0.5%.