Friday, January 29, 2010

What impact Walmart direct sourcing deal on B2B media?

The FT today leads its Companies and Markets section in Asia with a story headlined "Walmart reveals supply deal". If you're struggling to get over-excited about how Walmart buys cheap t-shirts and skirts in Asia, sit up and listen.

Products and services which support consumer merchandise sourcing dominate B2B media in Asia in terms of dollars earned. Companies such as, Global Sources and the Hong Kong Trade Development Council (OK, not really a company, but bear with me) make most of their money out of exhibitions, web sites, directories, magazines and other services which support this huge activity.

So, when Walmart, the colossus of global buying, announces a tie-up with Li & Fung, the 300lb gorilla of the sourcing middle men world, it's worth wondering what impact this will have on the supporting media. The FT quotes Walmart's Eduardo Castro-Wright saying that the company could save up to $12 billion a year if it meets its goal of sourcing 80% of what it purchases directly from manufacturers, cutting out middle men at every step of the way.

Is this good news, bad news, or indifferent news for the Asian B2B media industry?

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