Retail giant Wal-Mart Stores Inc. is shifting its business in China, the world’s most populous country, and the No. 2 economy.
On Monday, Wal-Mart said that it has raised its ownership stake in Chinese e-commerce and retail website Yihaodian, to 51 percent. It now has a majority ownership after the move.
Yihaodian, which is a Chinese website much like Amazon.com, specializes in selling groceries, baby products, toys, and electronics online. The company employs 5,400 and carries 180,000 different products. Yihaodian literally means “No. 1 store” in English.
“This investment further enables Walmart to deliver a superb customer experience to Chinese consumers that are already connected to the world through smartphones and social media,” Wal-Mart’s e-Commerce CEO Neil Ashe said in a statement.
“We are on track to create the next generation of e-Commerce, offering the latest in online innovations to give our customers a unique shopping experience.”
Wal-Mart is seeking to gain more stake in a growing business as more Chinese consumers are taking to the web to make purchases, including using smartphones and tablet computers.
New China Chief
Wal-Mart also recently named industry veteran Greg Foran as CEO of its Chinese business. Foran, who was formerly the head of Australia’s Woolworths Ltd., has been a retail industry veteran, however, it would be his first foray into the Asian market.
He takes over at a crucial time for Wal-Mart in China. Wal-Mart has been faced with stifling competition in that country both from local and other global competitors. The appointment has also raised some eyebrows amongst analysts, who say that retailers typically anoint local business executives to head regional operations, and Foran is a complete newcomer to the Chinese business environment.
“It is interesting that the new CEO is neither a Wal-Mart guy nor a ‘China Hand.’ Maybe this points towards a greater focus on enhancing core retail capabilities at Wal-Mart, for which a strong operator is more critical than someone with local market knowledge,” says Torsten Stocker of U.S. consulting firm Monitor Group, in a column on Just-Style, an apparel and retail industry news source.
Last year, Wal-Mart was mired in a scandal where the company mislabeled some pork products in stores in Central China, forcing the company to temporarily shut a few stores in the region.
Wal-Mart isn’t the only foreign retail giant operating in China. French retailer Carrefour and British retailer Tesco have both been expanding their retail presence in China as well.
Wal-Mart, based in Bentonville, Ark., is the world’s biggest retailer, with over $421 billion in annual revenues last year.