New Delhi: walmart is in talks with leading Indian electronics contract manufacturers to procure white label electronic products such as IT hardware, mobile accessories, wearables and more to sell in the US under its sub-brands.
Several industry executives familiar with the matter told ET that manufacturers such as Dixon Technologies And Optimus Electronics are in the fight for orders amid US retail wholesalers’ push to move sourcing, especially on the electronics side, to India.
“They did a lot of scouting in India to find out what the capabilities of the manufacturers are,” one of the executives, who declined to be named, told ET.
Walmart, which has a majority interest in flip kart and PhonePe, is looking for a wide range of products such as cables, chargers, screen protectors, home appliances, hearables, wearables, tablets, laptops and lighting.
Walmart employees have met with multiple contract manufacturers to inquire about their capabilities, processes and testing methods, the director said.
In response to an email, a Walmart spokesperson confirmed the development, stating that Walmart “has been quite open about our plans to buy from India.”
ET’s emails to Indian contract manufacturers Dixon, Optiemus Electronics, Jaina Group and Bhagwati Products seeking comment did not get a response until it went to press.
India is already one of Walmart’s key sourcing markets, with annual exports worth $3 billion as of 2020. That year, Walmart had said it planned to triple its exports of goods from India to $10 billion a year by 2027 .
“It will be a good starting point for Indian manufacturers to penetrate the US, and the export potential is huge,” said the first director, adding that Walmart wants to reduce its reliance on Chinese suppliers amid heightened geopolitical tensions between the US . and China.
In the short term, Walmart will look at products that are already assembled in India. “While procurement is slowly picking up, component manufacturers are expected to start manufacturing in India as well,” said the director.
A second executive said sourcing will begin in phases.
“Walmart approaches manufacturers who already make the products it wants to buy. For example, if a manufacturer has an in-house design of a laptop it makes for other brands, Walmart will come by and inspect it to make sure it meets their strict quality standards,” said the director.
But meeting the quality standards will be the biggest challenge for Indian manufacturers, the director said.
“They give you an indication of the categories they are looking at. They will give you their specs, and then you have to tailor the product to their requirements, and it has to go through a lot of certifications,” the director said.
The procured products will have to undergo reliability testing apart from meeting the requirements regarding recycling, environmental friendliness and some others which are currently not there in India.
“The Chinese suppliers understand it very well, but the Indian ecosystem will take time to implement them. I see them (compliance) as a bigger bottleneck than finances,” the second executive said.
They reasoned that most manufacturers have capacity that needs to be used up before expanding at a time when global sales of PCs and tablets are steadily declining.
The executive added that his company has also been in talks with some of Walmart’s suppliers for product sourcing.
“If Walmart buys Indian-made goods, chances are the other brands supplying Walmart will also be open to sourcing from India because they have already validated Walmart’s quality standards, processes, systems and systems. certifications. A few of those brands have already contacted us for some broad categories, which shows me that Walmart is serious,” the executive said.
To accelerate Indian exports, the company had said in 2020 that it will “enhance the development of India’s supply chain ecosystem, both by boosting existing exporters and expanding the national pool of export-ready companies”.
“By significantly accelerating our annual Indian exports over the coming years, we support the Make in India initiative and help more local businesses reach international customers, while creating jobs and wealth domestically in India,” Doug McMillon, president and Walmart’s chief executive officer had said at the time.