Wal-Mart Stores Inc. named a former executive from Li Ka-shing’s company to head the operations in India, after the breakup of a six-year local partnership stalled its efforts to expand in the country.
Krish Iyer, who joined the U.S. company last year, will become chief executive officer and president of Wal-Mart in India, effective Jan. 20, the Bentonville, Arkansas-based company said in an e-mailed statement today. He inherits Wal-Mart’s 20 wholesale stores and must find an Indian partner to open supermarkets, according to local laws. Its former CEO Raj Jain left the company in June amid government and internal investigations.
The world’s largest retailer opened its last wholesale store in October last year, while rival Metro AG unveiled its 16th store this week. Wal-Mart’s plan for its first Indian supermarkets suffered a setback following the end of its joint venture with billionaire Sunil Mittal. An internal probe of possible violations of U.S. anti-corruption laws is still in progress.
Reliance Retail Ltd. may add eight wholesale stores next year, according to a Hindu BusinessLine newspaper report.
Iyer’s arrival is unlikely to lead to significant changes in the near future at Wal-Mart’s Indian operations, said Dhvani Bavishi, retail analyst at brokerage ICICI Direct. The company needs to complete its anti-corruption investigations and deal with the legal formalities of the break-up with Bharti Enterprises Pvt. before it expands, she said.
“India expansion will be on a hold till then, and Wal-Mart will probably take a back seat in terms of growing vis-a-vis the other players,” Bavishi said.
While the nation changed laws in September last year to allow foreign companies to own majority stakes in multibrand retail chains, no global retailer has sought such licenses yet. While the government has loosened rules, the entry barriers for foreign retailers still “aren’t workable,” Scott Price, Wal-Mart’s Asia chief said in October.
Iyer joined Wal-Mart in 2012 after spending six years at A.S. Watson Group, a retailing unit of Hong Kong billionaire Li Ka-shing’s Hutchison Whampoa Ltd.
Jain’s departure following a six-year stint as the CEO came after the retailer suspended some executives at the Bharti joint venture, including the local chief financial officer. Ramnik Narsey, then a senior vice president at Wal-Mart International, was appointed interim CEO.
Bharti said in October that Jain had joined the company as an adviser.
Narsey becomes a senior vice president for Wal-Mart International, the retailer said today.