IndiaRetailBiz

Chinese suppliers of Wal-Mart will now be required to incur 20 times the current cost of providing identification on their products being supplied by them to the world’s largest retailer.

The move comes in the wake of recent safety concerns surrounding products originating from China.

Wal-Mart has instructed its vendors in China to use RFID tagging instead of standard bar-coding to provide information not only about the name and factory but also the details on any sub-contractors involved in production. While, the system has already begun to be introduced from October, this year, it will become standard procedure effective from January, 2009, according to an RFDI News report.

Wal-Mart has clarified that any suppliers who fails to meet the new information standards will be dropped from Wal-Mart’s supply chain.

Apart from providing quick information on products, it is expected that Wal-Mart would be able to save up to $8.35 billion annually, once the new technology is introduced.

This will also provide big fillip to RFID technology, which despite its promise has not been able to make significant inroads in retail business.

Wal-Mart is slated to launch its ‘cash and carry’ operations in India from early 2009. India’s telecom giant Bharti is Wal-Mart’s equal partner in India.