Walmart Gets Another New China Chief

Retail giant Walmart Inc. has promoted Wern-Yuan Tan to president and chief executive of the group's China business, taking over from Dirk Van den Berghe, regional president of the company's Asia operations.

Tan, a Singaporean, joined Walmart in April 2017 from fast-food chain McDonald's to lead its hypermarket operations in China. He will be the U.S. retailer's fourth president and CEO for the country in seven years.

Walmart, which has more than 400 stores in China, made the announcement in a statement (link in Chinese) on Friday. It said that under Tan's management, its hypermarket and e-commerce operations in China saw record financial and operational results. Sales in the fiscal quarter ending Jan. 31 rose by 4.1%, according to the statement, although that was a slowdown on the same period in 2017 when sales grew 5.4%. But same-store sales increased at the same pace in both quarters, by 2.3%.

Walmart, whose bricks-and-mortar stores in China have struggled over the last few years, rebooted its strategy for the country back in 2016, placing its bets on e-commerce and online sales to drive growth through a strategic alliance with Chinese internet retailing giant JD.com Inc. Under the partnership, Walmart leveraged JD.com's extensive logistics network to deliver goods ordered by customers online.

Wern-Yuan Tan came to Walmart from McDonald's in 2017 to lead the firm's China hypermarket operations. Photo: Walmart

In July, as part of Tan’s efforts, the two companies announced they were expanding their cooperation to further integrate their platforms, supply chains and customer resources in China, and as part of the agreement Walmart launched a flagship store on JD.com's internet platform. They promised that customers in many first- and second-tier cities who ordered before 11 a.m. would get same-day delivery from JD.com.

In its statement last week, Walmart said that e-commerce sales “exploded” last year and that they contributed to half of the company's growth in China last year. Cooperation between Walmart and JD.com extends to more than 160 stores in more than 20 cities.

“Walmart's performance in China for the past few years hasn't been that good, especially in its offline businesses which has been shrinking,” said independent e-commerce analyst Li Chengdong. “Its results haven't reached the company's expectations, so it is normal to see these changes,” he said.

Li said that the earnings of most of China’s supermarket operators have stopped growing over the last five years.

Walmart has seen rapid turnover in its China CEOs since Ed Chan resigned from the post in 2011 after four years, citing personal reasons. His departure came just after the company ran into trouble for labeling regular frozen pork as organic, which led to store closures and employee detentions.

Retail veteran Greg Foran was appointed to the job in 2012 but left after two years to become president and CEO of Walmart U.S. His successor, Sean Clarke, a veteran of Walmart, also lasted just two years, moving to the group's U.K. arm Asda in 2016. Van den Berghe took over the China role when he was appointed regional president of Walmart’s Asia business, which includes operations in Japan, in June 2016.

Contact reporter Coco Feng (renkefeng@caixin.com)