Walmart’s Mexico Unit Forces Suppliers to Drop Amazon
The rivalry between Walmart and Amazon is a fierce one, and it has now emerged that the latest instalment of that rivalry is being found in Mexico. According to a report in Reuters, the American retail giant’s unit in Mexico has gone after their suppliers who have been found to have supplied groceries and other items to Amazon, the biggest online retail company in the planet. The tactics employed by Walmart has seen some of the suppliers deciding against supplying their wares to Amazon, according to sources that are close to the developments regarding the issue.
Mexico remains one of the biggest overseas markets for both the American corporate giants, and while Amazon has consistently managed to break into new markets, it now has to contend with a rival like Walmart which is well known for killing competition. On top of that, Walmart has been operating in Mexico for a longer period and has the sort of clout to bully suppliers into toeing the line. The entire issue is ultimately down to the fact that the products that were being sold by Walmart de Mexico were being sold at a far lower price on the Amazon website and once that came to light, Walmart wanted the same deal from the suppliers in question. Although suppliers have insisted that they are in no way responsible for the listing price on the Amazon website, they had to ultimately acquiesce to Walmart’s wishes.
Needless to say, Walmart’s clout comes from the fact that it moves very large amounts of inventory on a daily basis and it is a bad business sense for any supplier to be on the wrong side of the retail giant. When Walmart was asked about its conduct regarding this affair, the company stated that it does not influence suppliers in this way at all. However, it went on to add that Walmart is always on the lookout for the best prices so that they can then offer the cheapest prices to its customers. The Chief of e-Commerce at Walmart de Mexico, Ignacio Caride stated, “We could never tell anybody that they can’t sell to someone else. If we think there’s an opportunity to lower our prices, because we see better prices at other retailers, we’re going to negotiate for that access.” However, Amazon has still refused to say anything on the matter so far. It remains to be seen how this saga plays out in the end.