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Published on : Jul 15, 2015

Walmart Stores Inc. made an announcement that the co-founders of the group’s Chinese e-commerce venture have decided to leave, which leaves center part of the retailer’s strategy in China into transition.

Chief Executive Liu Jungling and Chairman Yu Gang, both Dell veterans who launched the company in 2008, are departing to carry their next venture, as stated by Walmart spokesman Dan Toporek. 

Wal-Mart, holding 51% stake in the company, stated it will look for new leaders to take over the business.

The Wal-Mart spokesperson further added that the company was pleased with the success of Yihaodian in China, and will strategize for further growth in the region.

The departure of the founders may open doors for Wal-Mart to participate in day to day operations of Yihaodian, which the company long wanted to do. For many years, Wal-Mart tried to connect the logistics of the two company in order to work in sync. 

However, there have been challenges pertaining to integration, with resistance witnessed within Yihaodian, as stated by a person familiar with the partnership of the two companies. 

Wal-Mart, over the years, also tried to increase its share in the business, as stated by people familiar to the matter, but didn’t have success so far. Wal-Mart did not comment.

Wal-Mart is making efforts to improve its China operations in part by switching focus from brick-and-mortar stores to the online shopping boom in China. At a news conference in Beijing in April, Chief Executive Doug McMillon stressed upon the importance of China for the group, which accounts more than a quarter earnings outside the U.S., but reiterated that he would see the company progress slowly than make mistakes for fast growth.

The operations of the company in China has been stumbling. In the 400 Chinese stores of the retailer, traffic has been falling in the last three years.