Wal-Mart Stores Inc. said Tuesday that it has named Greg Foran, currently senior vice president for Wal-Mart International as president and chief executive officer of Wal-Mart China.
The move brings fresh leadership to Wal-Mart China after its former ceo and senior vice president for human resources resigned in October in the wake of a food-labeling scandal involving pork.
The company, the world’s largest retailer, said Foran will relocate to China pending work visa approval, and assume his new role effective March 1. He joined Wal-Mart in October 2011. Prior to that, he worked his way up the corporate ranks at Woolworths Supermarket division in New Zealand and Australia and spent time at other Woolworths subsidiaries dealing with discount department stores and electronics retailers.
Wal-Mart entered the Chinese market and opened its first Supercenter and Sam’s Club in Shenzhen in 1996. As of the end of January, it had over 370 units in 140 cities. Analysts said Foran’s appointment is surprising given that he has no prior experience in China and also a relatively short track record with the company.
“It is interesting that the new ceo is neither a Wal-Mart person nor a China hand, but that Wal-Mart decided to bring in someone from the outside,” said Torsten Stocker, a Shanghai-based partner at Monitor Group, a global research firm. “Maybe this points towards a greater focus on strengthening core retail capabilities and a slightly slower expansion path.”
Stocker noted that Foran oversaw Woolworths e-commerce business, which could “tie in with Wal-Mart’s recent investment in Yihaodian.”
In May 2011, Wal-Mart said it had purchased a minority stake in the holding company of Yihaodian, a Chinese e-commerce site. Taobao is the country’s largest e-commerce platform.
“They are flying in a guy who is on his first trip to China. I don’t know what that tells you,” said Paul French, chief China analyst for the market research firm Mintel. “I guess what they are trying to do is send in a clean slate. To send a message to the government that they are sending in someone whose hands were not in the mucky pie [of the food safety scandal].”
While the pork-labeling scandal may have damaged Wal-Mart’s relationship with the Chinese government, French said it did little to tarnish the company’s image in the minds of Chinese consumers, who face an almost constant barrage of food safety issues across the country. Rather, he said, one of the company’s ongoing challenges centers around localization.
In other Wal-Mart news, the company’s Canadian division said Tuesday it would invest $750 million to complete 73 new projects, including building new stores and expanding, remodeling or relocating existing units. The record expansion will add 4.6 million square feet to Wal-Mart Canada’s operations this year. Wal-Mart Canada operates 333 stores, including 164 Supercenters. Tuesday’s announcement will bring the store count to more than 375. More than half of the new projects are expected to be Supercenters, with the remainder, discount stores. Included in the 73 projects are most of the 39 former Zellers locations that Wal-Mart Canada bought leasehold rights to in June.