Walmart is planning to increase its exports from India to $10 billion by 2027 and is looking to source toys, shoes and bicycles from Indian suppliers. The company is also considering developing new suppliers in categories such as food, pharmaceuticals, consumables, health and wellness, and apparel and home textiles, according to a PTI report. An official from the firm recently held a virtual meeting with several domestic toy manufacturers and toy makers were, during the call, informed about their requirements and expected quality standards since the Bentonville-headquartered firm is directly engaging with the domestic toy makers for sourcing.
It was the DPIIT who brought Walmart and the toy association together, said the report. Confirming the development, a company spokesperson said, “Walmart’s growth in sourcing from India includes expanding working with existing suppliers and helping develop new suppliers in categories such as food, pharmaceuticals, consumables, health and wellness along with apparel and home textiles. We are also exploring opportunities in toys, shoes, and bicycles.”
Walmart had, in 2020, said that it will triple its exports of goods from India to $10 billion each year by 2027. The same year, Walmart’s annual exports from India were worth $3 billion. “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. It is also a way for Walmart to bring more high-quality, India-made goods to millions of customers all across the world,” Doug McMillon, President and Chief Executive Officer of Walmart Inc., had said.
Earlier this month as well, Doug McMillon had reaffirmed Walmart’s commitment during his visit to India and said that India’s unique ecosystem of suppliers will help the company in achieving its goal of exporting goods worth $10 billion from the country annually by 2027. He had also met Prime Minister Narendra Modi and tweeted, “Thank you Prime Minister Narendra Modi for a great conversation. We are working toward exporting USD 10B per year from India by 2027 and are committed to strengthening logistics, skill development & supply chains to make India a global export leader in toys, seafood & other goods.”
“The visit with Prime Minister Narendra Modi reinforces the shared value we bring working alongside India. Together, we’ll continue to support the country’s manufacturing growth and create opportunity,” McMillon had tweeted.
Walmart’s India focus
While Walmart has always dealt with customers directly, in India, it moved away from selling to customers directly by opening cash-and-carry format stores and acquiring companies like Flipkart and Phonepe. PhonePe was founded by ex-Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, and was later acquired by Flipkart in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was part of the $16 billion deal as well. Later in December 2022, Phonepe separated from its parent company Flipkart and the companies announced that both of them will function as separate entities with Walmart continuing to be the majority stakeholder in them.
“Walmart is committed to business in India and dedicated to making a difference in the lives of customers and supporting suppliers and sellers, while contributing to communities and the economy as part of India’s long-term growth,” the company website stated.
Walmart’s business in India includes the Flipkart Group which has a customer base of over 350 million and offers upwards of 150 million products across more than 80 categories; Flipkart Wholesale which is focused on enabling growth and prosperity for kiranas and MSMEs throughout India’s retail ecosystem; Myntra that offers fashion and lifestyle products to consumers; and Phonepe which is a payments platform with over 300 million registered users.
Walmart’s global sourcing, meanwhile, gives Indian manufacturers a way to sell their products including apparel, homeware, jewelry, hardlines and more, in overseas markets such as the US. Canada, Mexico, Central America and the United Kingdom. Further, Walmart Global Tech India is where the company is working on creating engineering and product development solutions to support Walmart’s strategy of offering customers an anywhere, anytime shopping experience.
India’s pivot from being a toy importer
Not only Walmart, global retailers such as IKEA are already sourcing toys from India for their international operations. While India was a net importer of toys until a few years ago, the recent moves represent India’s rising strength in the toy industry. In February 2020, import duty on toys was raised from 20 per cent to 60 per cent and now, it has increased to 70 per cent this year. The government is also considering announcing a fiscal incentive scheme in the form of PLI for toys. Earlier in 2020, the government issued a Toys (Quality Control) Order. As per the order, toys have to conform to the requirements of relevant Indian standards and bear the standard mark under a licence.