The heads of Walmart's Chinese eCommerce unit, Yihaodian.com, have left that company in order to “pursue their next venture,” the retailing giant said Wednesday (July 15).
Reuters reported that the two executives, Chairman Gang Yu and CEO Junling Liu, are leaving the company, and Walmart said in a statement that it is recruiting other leaders for the eCommerce operation. The newswire also reported that Walmart is looking to grow Yihaodian, which still lags behind rivals in China. Walmart will “work to accelerate [the company’s] growth … and Walmart continues to be committed to investing in China and in eCommerce,” the company said.
In terms of strategy, the company said it will close some of its underperforming stores in the country and will also look to leverage the relatively quicker growth of the online grocery market through the digital Yihaodian.com platform. And as it stands today, Reuters reported, Walmart’s online reach in China remains “dwarfed” by rivals that run the gamut from Alibaba Group Holding Ltd to JD.com, in addition to global companies such as Amazon.
Walmart is not alone in its battle to combat a slide in traditional retail. As Reuters noted on Wednesday, European companies such as France's Carrefour SA and Britain's Tesco PLC have lost ground to online competitors, which has in turn hurt their top lines over the past half decade, according to a report from Kantar Worldpanel, a consumer analytics firm.
Walmart’s push into China with Yihaodian began in earnest three years ago. In 2012, Walmart increased its ownership in Yihaodian to an ownership level, taking a 51 percent stake in the company. That strategy was tied to moving outside the traditional retail channel and taking advantage of an eCommerce boom in China.
In an interview with Reuters, the head of Walmart’s Asia operations, Scott Price, told the newswire that online retail remained an important leg of the company’s strategy in its ongoing efforts to reach younger consumers in the country. “What we’re finding is that the Chinese customer is going online, and they’re going online outside of China pretty aggressively,” the executive told Reuters.