HONG KONG (Reuters) - China's Ministry of Commerce has removed restrictions on Wal-Mart Stores Inc's WMT.N deal in 2012 to raise its stake in online supermarket Yihaodian, and said the move would not impact the already competitive market.
Entry barriers for China’s value-added telecommunication services have eased since 2014, facilitating the entry of new competitors, the ministry said in a statement.
“Under the restrictions, competitive edge of Yihaodian has been diminishing while its sales growth has been slowing,” the ministry said.
Yihaodian’s pace of development has lagged behind that of its main competitors, the ministry added.
Wal-Mart officials were not immediately available for comment.
In August 2012, the world’s largest retailer received “restricted” approval to raise its stake in Yihaodian and became the controlling shareholder with a 51 percent stake by buying into its parent.
Wal-Mart said in 2012 that the deal had received conditional approval by the ministry’s Anti-Monopoly Bureau.
The restrictions stipulated that Yihaodian must use its own e-commerce platform for sales, while its parent was not allowed to host third-party transactions on the platform.
In July last year, the U.S. retail giant took full ownership of Yihaodian, after buying out the remaining 49 percent stake to accelerate its online push. The move came shortly after China said it would allow full foreign ownership of e-commerce businesses.
Reporting by Donny Kwok; Editing by Gopakumar Warrier
Our Standards: The Thomson Reuters Trust Principles.