Wal Mart China CEO Quits Amidst Rising Concerns

October 22 00:00 2011

New York, Oct 22, 2011 (RainbowNewsLine.com) – Mr Ed Chan, CEO of Wal-Mart (NYSE: WMT) China since 2006 has quit amidst rising regulatory and business concerns which had a detrimental effect on Wal-Mart’s business in China. Mr Ed Chan was a key figure in Wal-Mart’s China strategy. It had taken Wal-Mart from a 70 store company in 2006 to a 353 store company in 2011. Clara Wong, senior Vice President Human Resources, Wal-Mart China has also quit citing personal reasons. This is sending negative messages to Wal-Mart investors in China and across the world.

China forms an instrumental part of Wal-Mart’s strategy going forward. With the western markets almost down in recession, the only thing that seems like it will keep the sales and profits growing is business is developing countries like China, India, Brazil and Russia. However, experts say that Chinese retail business has dropped for MNC’s like Wal-Mart. They are facing tough competition from Mom and Pop stores.

The increasing regulatory pressure against Wal-Mart may have been political in nature say experts. The Chinese government is well known at sending messages to organizations to be complaint. Since Wal-Mart is not a local company, its revenue losses do not bother China too much. This is one of the possible reasons why a shutdown was ordered for 13 stores in Chongqing.