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Walmart Reveals Massive Indian Sourcing Investments

Walmart is doubling down on its efforts to engage the Indian market—and not just its massive consumer base.

The company has released details about its Indian sourcing commitment, designed to significantly boost micro, small and medium-sized enterprises (MSMEs) in the country through an expansion of sourcing efforts with suppliers in categories like apparel, as well as homewares, general merchandise, food, pharmaceuticals, and health and wellness goods.

This new engagement expands upon existing supplier development programs designed to expand sourcing from India, it said. The Arkansas-based big-box retailer has sourced an array of goods from the country over the past two decades, touting it as one of its top sourcing markets with annual exports worth about $3 billion. It plans to reach $10 billion in India-made exports by 2027.

According to Walmart, India-made apparel, homewares, jewelry and other products are currently being sold through the company’s operations in 14 markets like the U.S., Canada, Mexico, Central America and the U.K. Walmart’s Global Sourcing office in Bangalore has enabled this expansion, helping local suppliers upgrade operations and meet product and labor standards, while enabling them to augment product lines and develop greater capabilities in packaging, marketing and supply chain management, it said.

With the growing importance of data, Walmart is also working to provide India’s suppliers with global market intelligence and demand forecast that they can leverage in service of their strategic planning.

“As an international retailer that brings value to customers and communities worldwide, Walmart understands that local entrepreneurs and manufacturers are vital to the success of the global retail sector,” Walmart Inc. CEO Doug McMillon said. “By significantly accelerating our annual India exports in the coming years, we are supporting the Make in India initiative and helping more local businesses reach international customers, while creating jobs and prosperity at home in India.”

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McMillon also believes that Indian exports are quickly earning interest from global consumers. The effort to develop deeper sourcing relationships in the country “is also a way for Walmart to bring more high-quality, India-made goods to millions of customers all across the world,” he said.

Walmart’s grassroots supplier development program, Vriddhi, launched last year with the goal of helping MSMEs cultivate the export skills and expertise that would enable them to scale effectively and better serve Walmart, Flipkart and other retailers across the globe. The program’s stated goal is to empower 50,000 businesses to develop products in India for both domestic and international supply chains over the course of five years.

Dipali Goenka, CEO and joint managing director of Welspun India Ltd., said that since her company became a Walmart supplier in 1998, it “has grown to become the world’s largest home textiles manufacturer, exporting 94 percent of our output and employing 20,000 people, 25 percent of whom are women.”

“Most significantly, businesses are agents of change,” she added, and Walmart’s influence on the Welspun business has sharpened its focus on “quality, sustainability and diversity and inclusiveness.” Goenka said that Welspun is a “homegrown brand that exemplifies the Make in India story internationally,” adding that it has stood in partnership with Walmart throughout “challenging times” like the present.

Walmart has made no secret of its clear desire to tap into India’s vast network of shoppers in recent years. The retailer acquired a 77-percent stake in Bangalore-based e-commerce giant Flipkart in May 2018 at the price of $16 billion, seeking to expand its penetration into India’s 300-million-plus strong consumer base through the merger. Earlier this year, in a show of confidence in the long-term viability of the Indian market, Walmart raised its stake in Flipkart to 82 percent in a funding round that ultimately garnered $1.2 billion. Flipkart is now valued at almost $25 billion, and is rumored to be considering an IPO.

Walmart will now bolster Flipkart’s Samarth platform, which, like the Walmart Vriddhi program, aims to support the development of India’s underserved artisans and suppliers. Samarth helps them with administrative tasks like registering, listing and cataloguing their products on the marketplace, and gives suppliers access to a dedicated account manager to help run their businesses online. Flipkart Samarth also offers these small businesses space in their warehouses for their products, along with a competitive commission structure that lowers the cost of doing business on the platform.

“Flipkart is proud to work with thousands of great Indian brands, MSMEs and artisans, with a focus on making them successful,” the company’s CEO, Kalyan Krishnamurthy, said. “We provide a platform that allows them to reach the pan-India market and refine their all-important branding, marketing, logistics and compliance capabilities for the global market, too.”

“We applaud Walmart for investing to help Indian companies take Make in India products global,” she added.