Walmart, the world’s largest retailer, is importing more goods from India and reducing its dependence on China as it seeks to cut costs and diversify its supply chain, recent data shows. From January to August this year, the retail giant imported a quarter of its U.S. imports from India, up from 2% in 2018, according to Import Yeti’s bill of lading statistics shared with Reuters. increased to At the same time, China’s share of Walmart’s shipments decreased from 80%. % in 2018 to 60% over the same period. However, China remains the retail giant’s largest importer of goods.
This change in trends highlights the impact of rising import costs from China and rising political tensions between the United States and China. Companies like Walmart are now exploring alternative sourcing countries such as India, Thailand and Vietnam.
Andrea Albright, Walmart’s executive vice president of procurement, said the need for resilient supply chains, best prices, and reducing reliance on a single supplier or location due to a variety of factors such as natural disasters and material shortages emphasized.
Walmart also said bill of lading data only provided part of the procurement. Mr. It confirmed that the company will pursue more manufacturing capacity without specifically reducing its dependence on any particular market. India, in particular, has become critical to Walmart’s manufacturing capacity expansion strategy, Albright said.
Retail giant accelerates presence in India after acquiring majority stake flipkart As of 2018, the goal is to import goods worth $10 billion annually from India by 2027. It currently imports approximately $3 billion worth of goods annually from India and remains on track to achieve its set targets.
Why India Works at Walmart
Albright said Wal-Mart has expanded its imports from India, with products ranging from toys and electronics to bicycles and medicine. She said processed foods, dry grains and pasta are also popular imports from India.
India’s stock market has soared to record levels this year, and the country is seen as being better positioned than China for large-scale, low-cost manufacturing. Walmart is attracted to India’s expanding workforce and technological advances. Conversely, China experienced its first population decline in 60 years last year.
Walmart started its procurement operations in Bangalore in 2002 and currently employs over 100,000 employees, including temporary employees, across various divisions such as Walmart Global Tech India, Flipkart Group, Phonepe, and Procurement Operations. doing.
Walmart CEO Doug McMillon meets with Indian Prime Minister narendra modi Earlier this year, Prime Minister Modi described the talks as fruitful. Mr. McMillon affirmed Walmart’s commitment to supporting growth and creating opportunities for India’s manufacturing industry. Walmart’s competitor Amazon aims to export $20 billion worth of goods from India by 2025.
Rajesh Karabandha, CEO of Freewill Sports, a small soccer ball supplier in India, emphasized that this change in sourcing is having a positive impact on companies like his.
Supply chain experts cited by Reuters suggested rising shipping costs from China are contributing to Walmart’s pivot to India. Chris Rogers, research analyst at S&P Global Market Intelligence, said rising labor costs in China compared to other manufacturing locations are making sourcing from mainland China less competitive. .
A Reuters analysis said the minimum wage in China varies by region, ranging from 1,420 to 2,690 yuan ($198.52 to $376.08) per month. Meanwhile, average wages for unskilled and semi-skilled workers in India range from about INR 9,000 to INR 15,000 ($108.04-$180.06) per month, according to central bank estimates.
supply chain management
The pandemic has highlighted the fragility of global supply chains and revealed the overreliance of U.S. importers on a few markets. Albright noted the need to ensure diversification of product sourcing for contingency planning. Wal-Mart’s sourcing strategy extends to Pakistan and Bangladesh, Albright said, adding that the company is expanding its sourcing of household goods and apparel products.
According to U.S. import records, a large number of shipments from Freewill arrived at Wal-Mart warehouses from Mandla port in Gujarat state, India’s largest civilian port. Rajesh Karabandha highlighted renewed confidence in India’s manufacturing and infrastructure availability, reflecting the change in perception.
India’s central bank forecasts economic growth of 6.5% this fiscal year, while China is expected to grow around 5%.
Shekhar Gupta of Devgiri, which has been supplying rugs to Walmart for a decade, says Walmart’s strategy has changed markedly in the past year and a half, with a clear focus on making India a core part of its expansion plans. he pointed out.
This change in trends highlights the impact of rising import costs from China and rising political tensions between the United States and China. Companies like Walmart are now exploring alternative sourcing countries such as India, Thailand and Vietnam.
Andrea Albright, Walmart’s executive vice president of procurement, said the need for resilient supply chains, best prices, and reducing reliance on a single supplier or location due to a variety of factors such as natural disasters and material shortages emphasized.
Walmart also said bill of lading data only provided part of the procurement. Mr. It confirmed that the company will pursue more manufacturing capacity without specifically reducing its dependence on any particular market. India, in particular, has become critical to Walmart’s manufacturing capacity expansion strategy, Albright said.
Retail giant accelerates presence in India after acquiring majority stake flipkart As of 2018, the goal is to import goods worth $10 billion annually from India by 2027. It currently imports approximately $3 billion worth of goods annually from India and remains on track to achieve its set targets.
Why India Works at Walmart
Albright said Wal-Mart has expanded its imports from India, with products ranging from toys and electronics to bicycles and medicine. She said processed foods, dry grains and pasta are also popular imports from India.
India’s stock market has soared to record levels this year, and the country is seen as being better positioned than China for large-scale, low-cost manufacturing. Walmart is attracted to India’s expanding workforce and technological advances. Conversely, China experienced its first population decline in 60 years last year.
Walmart started its procurement operations in Bangalore in 2002 and currently employs over 100,000 employees, including temporary employees, across various divisions such as Walmart Global Tech India, Flipkart Group, Phonepe, and Procurement Operations. doing.
Walmart CEO Doug McMillon meets with Indian Prime Minister narendra modi Earlier this year, Prime Minister Modi described the talks as fruitful. Mr. McMillon affirmed Walmart’s commitment to supporting growth and creating opportunities for India’s manufacturing industry. Walmart’s competitor Amazon aims to export $20 billion worth of goods from India by 2025.
Rajesh Karabandha, CEO of Freewill Sports, a small soccer ball supplier in India, emphasized that this change in sourcing is having a positive impact on companies like his.
Supply chain experts cited by Reuters suggested rising shipping costs from China are contributing to Walmart’s pivot to India. Chris Rogers, research analyst at S&P Global Market Intelligence, said rising labor costs in China compared to other manufacturing locations are making sourcing from mainland China less competitive. .
A Reuters analysis said the minimum wage in China varies by region, ranging from 1,420 to 2,690 yuan ($198.52 to $376.08) per month. Meanwhile, average wages for unskilled and semi-skilled workers in India range from about INR 9,000 to INR 15,000 ($108.04-$180.06) per month, according to central bank estimates.
supply chain management
The pandemic has highlighted the fragility of global supply chains and revealed the overreliance of U.S. importers on a few markets. Albright noted the need to ensure diversification of product sourcing for contingency planning. Wal-Mart’s sourcing strategy extends to Pakistan and Bangladesh, Albright said, adding that the company is expanding its sourcing of household goods and apparel products.
According to U.S. import records, a large number of shipments from Freewill arrived at Wal-Mart warehouses from Mandla port in Gujarat state, India’s largest civilian port. Rajesh Karabandha highlighted renewed confidence in India’s manufacturing and infrastructure availability, reflecting the change in perception.
India’s central bank forecasts economic growth of 6.5% this fiscal year, while China is expected to grow around 5%.
Shekhar Gupta of Devgiri, which has been supplying rugs to Walmart for a decade, says Walmart’s strategy has changed markedly in the past year and a half, with a clear focus on making India a core part of its expansion plans. he pointed out.