Yhd.com, one of China’s top ten e-commerce portals, is facing a wave of middle-level employee resignations as Walmart takes full control of the company.
The major reason for the tide of resignations is that as high level executives leave the company, many projects will no longer be carried to fruition, and people are feeling pessimistic about their future with Yhd, Beijing Business Today reported on Monday.
Co-founders Yu Gang and Liu Junling of Yhd, officially resigned from the company in mid-July to start a new online pharmacy. A week later, Walmart announced it had acquired all remaining company stock and took full control of the company.
It is reported that Walmart had intended to cut down on staff numbers at Yhd and staff merely responded to this by starting to leave before the layoffs began in earnest.
“Staff are now lining up to finalize their resignations,” an anonymous resignee told the newspaper.
“There was no big change in the business when Walmart took over. It seems even revenue coming in from Walmart was decreasing,” he added.
Yhd once had a glorious history. The company began their business in the fast-moving consumer goods sector and soon expanded into other sectors like clothes and electronic devices.
Yhd had RMB 2.7 billion (USD 420 million) in yearly turnover in 2011 and was once regarded as the biggest competitor to rival JD.com.
However, with relatively low transactions per customer, Yhd was constantly haunted by financial pressures. Transactions per customer at JD.com, which at that time, primarily focused on electronic devices, were twice the amount of Yhd.
Ping’ An Group, the parent company of Ping’ An Insurance and Lufax, acquired 80% of Yhd for RMB 80 million (USD 12.57 million) in 2011. Walmart acquired a further 20% of Yhd for RMB 450 million (USD 70.72 million) later that year and upped its stake to 51% in 2012.
With the investment, Yhd’s revenue soared from RMB 800 million (USD 125.72 million) in 2010 to RMB 11.5 billion (USD 1.81 billion) in 2013. Investors at this point, did not interfere in the daily operation of the business.
Yhd attempted to boost their business with new product categories and a higher percentage of third-party retailers, but none of these efforts seemed to really work out. By the end of Q2, 2014, Yhd’s market share shrunk to only 1.4% of the overall e-commerce market while leading companies, Tmall with 53.7% and JD.com with 21.2%, continued to dominate much of the sector, according to iResearch.