US retail giant Walmart is shifting its procurement strategy in response to a sea change in fast moving consumer goods (FMCG) manufacturing from the Global South.
The company recently announced a new partnership with major Indian bicycle manufacturer Hero Ecotech—part of a larger commitment to grow its annual procurement of Indian direct export goods to $10 billion per year by 2027.
Broadly speaking, Walmart’s strategy is to accelerate its procurement of goods from “categories where India has expertise.” These include food, consumables, health and wellness, general merchandise, apparel, homewares and toys. Additionally, Walmart spokespeople have noted that India—which is home to the third largest pool of scientists and technicians in the world—“has some of the brightest minds in innovation, and we want to explore potential solutions to challenges in our value chain with these innovators and startups.”
Andrea Albright, Executive Vice President of Sourcing at Walmart commented: “India is well-positioned to support increased demand for products by Walmart customers, and we are excited about our partnership with Hero Ecotech. This collaboration furthers our work to strengthen resiliency in our global supply while contributing to economic growth worldwide.”
India’s manufacturing sector is booming. Led by the automotive, electronics, and textiles sectors, Indian manufacturing is projected to reach $1 trillion in the next three years, according to a report by Colliers. A surge of investment—both domestic and international—is driving this growth, with the state of Gujarat receiving the lion’s share of the growth as the region is “becoming India’s manufacturing powerhouse.”
In order to support the development of its procurement network among Indian suppliers, Walmart has also announced plans for an invite-only event to be held in New Delhi this February, where “Indian export-ready suppliers are invited to apply to pitch their products to our buyers for Walmart U.S. stores and Sam’s Clubs,” and “Innovative Indian companies are invited to pitch solutions addressing sourcing challenges across apparel, general merchandise, fresh and packaged food, health and wellness, and consumables. Pitches may lead to pilot projects within Walmart’s value chain.”
By Harry Menear