Walmart riding on TPP advantages

Kevin Gardner, senior director of Walmart Global’s International Corporate Affairs, told Vietnam Investment Review (VIR) last week in an interview that Walmart was a strong advocate of the TPP negotiations from which it could greatly benefit.

“This comprehensive trade agreement provides market access and will bring a wide range of Vietnamese goods and agricultural products to consumers in our key retail markets in the US, Canada, Mexico, Japan and Chile,” he said.

The delayed TPP negotiations, which will hopefully be signed next year, are a multilateral free trade pact between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam. Once signed, the pact is expected to cover almost 40% of global gross domestic product.

“By gaining tariff-free access to large markets such as the US and Japan and by reducing non-tariff barrier, Vietnam could see faster export growth and large gains in gross national product than any other TPP members,” said Professor Robert Lawrence from the John F. Kennedy School of Government at Harvard University.

“Walmart does not have retail operations in Vietnam now, and we don’t have plans to open stores there,” Gardner said when questioned about expansion plans.

However, Walmart opened a sourcing office in Ho Chi Minh City in late 2013, and its current presence in Vietnam is through this office, which employs approximately 20 people and has relationships with numerous suppliers in Vietnam.

Walmart is sourcing apparel, footwear, homewares, toys and seasonal items from Vietnam.

Establishing “strategic relations with growers and economic groups” is important for Walmart and its customers, and having an office in Vietnam enable it to “more broadly and effectively” operate and better facilitate the identification and selection of suppliers while monitoring the manufacturing process to ensure compliance, safety and quality, Gardner said.

In January 2014, Walmart’s Global Sourcing vice president Bill Foudy came to Vietnam in search of more market opportunities and met with Minister of Planning and and Investment Bui Quang Vinh.

“Our presence in Vietnam will prompt other investors to come to Vietnam to do business,” Foudy said. “We will also provide local partner with technical assistance.”

A good example of Walmart’s sourcing relationships in Vietnam with Thuan Phuong Embroidery, which Walmart has been working with for more than four years.

“The owner of this business has been successfully exporting her products to the US, and we are hoping her to expand further with our direct business,” Gardner said.

Walmart currently operates retail outlet chains in North America, South America, Europe, Africa, Japan, India and China.