Executives left online retailer Yihaodian to start a new company.

(Bloomberg)—Wal-Mart Stores Inc. is regrouping again in China after the founders of a local e-commerce company it controls left to start a new venture.

New leaders are being recruited to replace the chairman and chief executive officer of Yihaodian, a business started in 2008, according to an emailed statement from Wal-Mart on Wednesday. Yu Gang, Yihaodian’s chairman, and Liu Junling, the CEO, couldn’t be immediately reached for comment.

The shake-up is another complication for Wal-Mart in China, where it’s struggled to adapt to the local culture and buying patterns. Competition from incumbent retailers and a series of food scandals have hobbled the company’s attempts to boost market share in the country. Yihaodian, No. 7 in the Internet Retailer 2015 China 500, closed some of its unprofitable stores last year, though it plans to open 114 others and invest $60 million in renovating existing locations.

Wal-Mart became the majority shareholder of the Shanghai-based online retailer in 2012 as it sought to tap China’s e-commerce boom.

“We are pleased with the success Yihaodian has had in China and will work to accelerate that growth,” the Bentonville, Ark.-based company said in the statement. “Wal-Mart continues to be committed to investing in China and in e-commerce.”

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A Wal-Mart spokeswoman declined to comment when asked about the circumstances of the duo’s departure, including arrangements for the remaining 49% stake in Yihaodian that the retail giant doesn’t own.

 

Chasing Alibaba

Yihaodian is ranked fifth in China’s Internet retail market, with a 2% share. It trails industry leader Alibaba Group Holding Ltd., which has 44%, and second-place JD.com Inc., with 14%, according to research firm Euromonitor International.

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Yu started Yihaodian with Liu after working as a supply-chain executive at Dell and Amazon.com Inc. The e-commerce website sells products ranging from imported infant formula and fresh vegetables to iPhones.

The company had been working with Wal-Mart on building synergies in sourcing, transportation and e-commerce technology, Yu said in a 2013 interview.

Wal-Mart was the third-largest superstore retailer in China in 2014, with 10.6% of the market, according to Euromonitor. It ranks behind the French chain Auchan Group SA and China Resources Enterprise.

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