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Walmart backslides on Made in America pledge

News, 28 July 2017
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CHICAGO: Walmart.com, the US shopping giant’s e-commerce service, is recruiting vendors from countries outside of the US, including China, in a pivot away from its Made-in-America campaign, according to a Reuters report.

Despite claims that US-manufactured goods are core to the brand’s purpose, not all the products that consumers want are made in America. Meanwhile, the retailer’s online site struggles to compete with the number of goods offered on Amazon.com.

Two sources with a knowledge of the developments told Reuters that the chain began inviting sellers from China, the UK, and Canada to list goods on the retailer’s marketplace section, where Walmart lists goods sold and delivered by third-party vendors in return for a share of revenue. Previously, only US-based sellers were allowed to list.

The necessity of foreign vendors goes against a raft of feeling in the US. Their inclusion clashes with President Donald Trump’s ‘Made in America’ platform, highlighted, earlier this month, by a week celebrating US manufacturing.

Yet the greater risk is from the company’s US vendors, as the reversal also contradicts the US-made commitment it made in 2013 to appease critics of the low-cost model, which they argued cost American jobs.

“It's bad timing to start such a program given President Trump's push in this direction and the resources they (Wal-Mart) spend on promoting a patriotic image,” one vendor told Reuters.

In an effort to shrink the gap between the products offered by Amazon and its own service, bolstering the third-party marketplace is crucial. According to analysts, Amazon’s marketplace of global vendors contributes to almost half of the site’s retail sales.

In contrast, Walmart’s marketplace contributes just over 10% to the company’s e-commerce revenue. But taken as a proportion of Walmart’s total revenue, the marketplace’s takings are a drop in the ocean.

The unannounced development follows Walmart’s launch of a policy roadmap to renew US manufacturing. The company’s release quoted CEO Doug McMillon affirming Walmart’s commitment to “help renew U.S. manufacturing and drive the creation of manufacturing jobs across the United States”.

Among consumers, however, a recent Reuters/Ipsos opinion poll found that while 70% considered US-made goods to be very or somewhat important to their purchase decision, there was little enthusiasm to pay significantly more for them.

Data sourced from Reuters, The Guardian, Walmart, Ipsos; additional content by WARC staff

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