SHANGHAI/HONG KONG (Reuters) ? Wal-Mart Stores Inc (WMT.N) named company executive Greg Foran as the president and chief executive of Walmart China, capping a series of leadership changes at the China unit that has been tainted by food scandals.
Foran, who joined Walmart in October after a long career with Australian retailing group Woolworths (WOW.AX), was chosen to replace Ed Chan, who stepped down last year after a pork mislabeling scandal that forced the company to temporarily shut a dozen stores in central China. [ID:nL3E7LH09P]
Some analysts questioned the wisdom of putting a relative newcomer at the helm of the China operations for the world's largest retailer as it faces fierce competition from both local and other global companies.
"The new appointee seems to have comparatively less China on-the-ground experience," said James Roy, senior analyst at China Market Research Group based in Shanghai.
"I think for a lot of American companies and a lot of foreign companies, they need people from inside who know the company culture well, and it is important to have a balance between that and the operating environment in China," he said.
"Whether it is local Chinese or not, it should be somebody who understands the market."
Foran is currently serving as senior vice president, Walmart International, and will start his new role on March 1, the company said in a statement on Tuesday.
FROM PART-TIMER TO DIVISION HEAD
Before joining Walmart last year, Foran, a 30-year retail veteran, had moved up the ranks in New Zealand and Australia at Woolworths, from a part-time job stocking shelves to head of Woolworths' Supermarket Division.
Foran held several senior roles within Woolworths, including General Manager of Big W, the company's discount department store division, and Dick Smith, which specializes in consumer electronics. His experience includes operations, merchandising, marketing and replenishment.
Foran quit after missing out on the top job at Woolworths, the Sydney Morning Herald said in a report in July.
Walmart has not always had an easy time during the past 15 years as it has expanded across China, where it now has more than 350 stores.
Last October, the Chinese city of Chongqing penalized Walmart after the firm was found to have mislabeled some pork as organic at a couple of its stores. Authorities said the pork scandal was the latest in a string of 21 violations dating back to 2006.
Walmart had also suffered a series of high level personnel losses last year, after its China chief financial officer and chief operating officer left in May, leaving a leadership vacuum.
Walmart's troubles in China reflect the retail giant's struggles in a complex market where rapid expansion and a cumbersome takeover have marred profit and growth.
Walmart China has faced intense competition on the mainland in recent years. It competes with China's Sun Art (6808.HK) and China Resources Enterprise (0291.HK), with local brands such as Yonghui, Shinshiji among others.
It also competes against French hypermarket chain Carrefour (CARR.PA), Britain's Tesco (TSCO.L), Germany's Metro AG (MEOG.DE). All of these are gradually expanding to inland China as interior cities become more affluent.
Foran could benefit Walmart's position in China if he taps those who have local expertise, some analysts said.
"The appointment itself is good in strengthening the management in purchasing and operation, but I still have a question on how effective it is if he did not know much about the (local) market," said Jason Yuan, analyst at UOB Kay Hian Research in Shanghai.
(Writing by Ken Wills; Editing by Kazunori Takada and Muralikumar Anantharaman)
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