CHICAGO--Walmart.com, trailing Amazon.com Inc in the number of goods for sale on its website, is recruiting vendors in China and other countries to boost its online offerings in a pivot away from Wal-Mart's Made-in-America campaign.
While there is a financial incentive behind the move, Wal-Mart's decision comes out of necessity: not all the goods its customers want - ranging from jeans to bicycles to beauty products - are manufactured within the United States. That reality pits Wal-Mart against President Donald Trump's "Made in America" push.
It also risks alienating some of Wal-Mart's existing U.S. vendors since it runs counter to the American-made pledge the retailer made in 2013 in a bid to win customers, and satisfy unions and other critics who said its drive for low cost goods was undermining American jobs.
According to two sources with knowledge of the matter, Wal-Mart Stores Inc in February began inviting sellers from China, the United Kingdom and Canada to list on the marketplace section of Walmart.com, where it earns a share of revenue from goods sold and delivered to customers by third-party vendors. Previously, it only allowed U.S. based sellers on the marketplace site, sources said.
Calling the unreported move a "measured approach," Wal-Mart Vice-President of Partner Services Michael Trembley confirmed the invite-only programme. He said foreign sellers currently make up less than five percent of its seller base.
Trembley said Wal-Mart's move is focused on meeting customer demand for different types of products and increasing online assortment. Wal-Mart's marketplace inventory has quintupled this year to 50 million items.
That still pales in comparison to Amazon's nearly 300 million products online, analysts said. Shrinking that gap is key to Wal-Mart's strategy to beat Amazon.
Launched in 2009, the marketplace platform contributes more than 10 percent to Wal-Mart's e-commerce revenue, but barely registers in total sales of nearly $486 billion, according to data from e-commerce analytics firm Marketplace Pulse. The data could not be independently verified by Reuters. Amazon's third-party marketplace, which also uses global vendors from countries like China, contributes to nearly half of Amazon's retail sales, analysts said.
The move brings risks beyond the impact to Wal-Mart's sales. Trump kicked off a "Made in America" week earlier this month where he promised he would take more legal and regulatory steps during the next six months to protect American manufacturers, lashing out against trade deals he said have hurt U.S. companies. Trump's comments come as the White House is seeking to renegotiate the 23-year-old North American Free Trade Agreement (NAFTA) in an effort to shrink the trade deficit with Canada and Mexico.
"No longer will we allow other countries to break the rules, steal our jobs and drain our wealth," Trump said in a weekly address tweeted by the White House on July 21. "Instead we will follow two simple but very crucial rules: We will buy American and we will hire American."
