Walmart China interview: How to survive and stay ahead

What is your role at Walmart China?

I am the senior vice president, general counsel and chief ethics officer for the company. Walmart entered the Chinese market and opened its first Supercenter and Sam's Club in Shenzhen in 1996. As of June 30 2015, Walmart operates 415 units covering 166 cities in 19 provinces, two autonomous regions and four municipalities nationwide. The company has created more than 100,000 job opportunities across China. I am responsible for the legal affairs and the management of the company's ethics program in China.

Specifically, as general counsel, I have a team of about 28 legal professionals. Together we manage legal aspects of the business such as real estate, M&A, merchandising, employment and litigation. I work with management to assess and manage enterprise-level risks and come up with solutions for crisis management. I also sit on the real estate as well as compliance committee to provide counsel and oversight on our business decisions as we continue to grow in this important market.

In terms of ethics, I lead a team of nine associates to manage and enforce Walmart's Statement of Ethics. We work closely with our business partners in promoting ethics and integrity in our daily operations.

What regulatory challenges does the company face in terms of operating in China?

Walmart entered the market in around 1996, so we have come across issues that most multinational companies (MNCs) have experienced in China, from the opening of the market to the more recent focus on food safety. We don't face any regulatory challenges that are really unusual or unique to Walmart, but rather what most MNCs face in this competitive market. We do our best to anticipate changes in regulatory direction and plan ahead. The goal of the legal and management teams is to try to foresee issues and adjust business practices accordingly to comply with the law.

What significant labour challenges does Walmart China face as one of the largest foreign employers in the country?

The retail business is a people business. We continue to strive to find quality associates to work in our stores, which isn't an easy task given the fierce competition for talent. We compete for scarce labour and retain our associates by providing a competitive compensation program as well as focusing on career development for those who aspire for a long-term career in the company, whether it's in the store or corporate office. On the other hand, as with any retail business, we understand attrition is also part of the business process, especially in a vast and competitive market like China.

How do the latest legal developments in consumer protection and food safety impact your work and the company?

There have been lots of regulations issued to protect consumers over the last couple of years. Walmart aims to be the most trusted retailer in any market in which we operate. Trust takes years to build but only one incident to ruin. To drive toward our goal of being the most reliable retailer in China and to protect our hard-earned customer trust, we have done a lot of work to strengthen our supply chain, such as enhancing supplier and merchandise audits, increasing the coverage area of our fresh distribution centres to ensure quality of our food products, to name a few. We also significantly increased our investment in food safety from 2013 to 2015, totalling over Rmb300 million, to better ensure the safety and quality of the food products sold in our stores. In addition, we have allocated a significant amount of resources to enhance the internal compliance programme and we take the same careful approach for our e-commerce platform and products.

The legal department plays a key role in our endeavour to become the most trusted retailer in China. We closely monitor the latest developments in laws and regulations that touch on consumer protection whether they are related to product or food safety. Our lawyers not only advise on the interpretation of the law but they also work with the business and compliance teams to devise practical and actionable compliance solutions.

Does the latest edition of the Foreign Investment Industrial Guidance Catalogue affect Walmart China's business? How will it be affected by the PRC Foreign Investment Law?

Like many other MNCs, we are closely monitoring the legislative development of the draft Foreign Investment Law, which isn't expected to come into effect for likely another year or two. The current draft contains provisions that impose strengthened disclosure requirements on companies that may potentially impose additional operating costs. The definition of “foreign investor” as stipulated in the draft legislation may also impact how we structure our business activities. It is still too early to tell how and to what extent this legislation will impact our business in China, but we are paying close attention to it.