The U.S. retailer sold 144.5 million shares for $24.95 apiece, people familiar with the matter said, asking not to be identified because the information is private. That’s a discount of 11% to Tuesday’s close in the U.S., according to Bloomberg calculations, and near the lower end of an indicative $24.85 to $25.85 price range. 

JD.com’s Hong Kong-listed shares fell as much as 12% on Wednesday, leading a broader selloff in Chinese e-commerce and tech stocks. Walmart is refining its strategy in the world’s second-largest economy, where its long-standing e-commerce partner is struggling along with traditional rivals Alibaba Group Holding Ltd. and Temu-owner PDD Holdings Inc. 

The U.S. firm has built a mature e-commerce and delivery system in China for both Sam’s Club and its hypermarkets business and is focusing on its own offerings, a person familiar with the matter said, speaking on condition of anonymity. The deal also comes as a property crisis, market volatility and uncertain job prospects take a toll on Chinese consumption.

“I expect Walmart will be disappointed with the horse they backed,” said Mark Tanner, managing director at marketing agency China Skinny. “It doesn’t feel like the original ambitions have quite panned out as planned at the time of acquisition.”

Morgan Stanley is the broker-dealer handling the offering, according to people familiar with the situation. JD.com also bought back $390 million of its shares today. 

The sale will enable Walmart to “better focus on the country’s strong development” including Sam’s Club and its hypermarket business, and “allocate funds to other priorities”, according to a statement from the company. The retailer said it will continue to cooperate with JD.com, describing the Chinese e-commerce firm as a “precious partner”. JD.com has confidence in future collaboration between the two companies, it said in a statement. Morgan Stanley didn’t immediately respond to requests for comment.

Walmart’s Sam’s Club franchise has been a bright light for the company, making it the only hypermarket chain to post sales growth last year among the top 5 players, according to China Chain Store & Franchise Association. In China, the unit offers premium goods with a membership model that’s now being copied by rivals, while the company’s other basic hypermarkets are struggling along with competitors. Walmart is likely to redeploy the capital from the sale to expand its own stores, according to a report from Citigroup Inc. 

Meanwhile, China’s biggest online retailers are trying to reverse their slumping fortunes as economic uncertainty and consumers’ shifting shopping habits weigh on earnings. Last week, Alibaba—long a barometer for the industry—surprised investors when it revealed its main commerce business actually shrank in the June quarter. 

JD.com’s June-quarter results beat expectations—even though revenue grew a mere 1.2%. That extended a string of single-digit quarters dating back to 2022, a period of malaise that’s halved its market value since the start of last year.

The Walmart-JD break also follows a pattern of online and offline retail businesses dissolving their partnerships, as earlier ambitions to seamlessly merge the physical and cyber consumer experiences failed to be realized. Earlier this year, Bloomberg reported that Alibaba is considering selling its InTime department store arm. 

The share sale would mark the winding down of a partnership between the two companies that started when Walmart acquired a 5% stake in the Chinese company in 2016. That deal also involved JD.com taking over Walmart’s Yihaodian online marketplace, which focused on selling groceries to higher-end female shoppers in major Chinese cities, the companies said then.