Walmart Stores, Inc, the world's largest retailer, has recalled donkey meat sold at some outlets in China after tests showed the product contained the DNA of other animals, the US company said.

Walmart will reimburse customers who bought the tainted "Five Spice" donkey meat and is helping local food and industry agencies in East China's Shandong Province investigate its Chinese supplier, it said late on Wednesday in official posts on China's Twitter-like Weibo. The Shandong Food and Drug Administration earlier said the product contained fox meat.

The scandal could dent Walmart's reputation for quality in China's $1 trillion food and grocery market where it plans to open 110 new stores in the next few years. China is the largest grocery market in the world and is set to grow to $1.5 trillion by 2016, according to the Institute of Grocery Distribution.

"This is another hit on Walmart's brand, meaning wealthy shoppers will start to lose the trust they had before," said Shaun Rein, Shanghai-based managing director of China Market Research (CMR) Group. CMR estimates Walmart's market share fell from 7.5 percent to 5.2 percent over the last three years.

Donkey meat is a popular snack in some areas of China, although it only accounts for a tiny fraction of overall meat consumption. In 2011 China slaughtered 2.4 million donkeys, according to the country's livestock industry yearbook.

Walmart, French grocer Carrefour SA, McDonald's Corp and KFC-parent Yum Brands Inc, among others, have come under fire before in China over food safety issues, a sensitive topic in a country riddled with scares from a fatal tainted milk scandal to recycled "gutter oil" used for cooking.

Walmart said it had set up an investigation team to look into the incident, would strengthen food safety rules and take legal action against the product supplier. It added the person in charge at the supplier factory had already been detained.

"We are deeply sorry for this whole affair," said Walmart's China president and CEO, Greg Foran. The US retailer has had a troubled past in China.