Even though Walmart has successfully been able to persuade many of its suppliers that using RFID technology is beneficial in the long run, the US retailer will have a hard time persuading its Chinese suppliers that RFID technology is better for them as well. Not only will this be beneficial to Walmart’s Chinese suppliers, but to Walmart as well who receives approximately 50-70% of their dry goods from China.
RFID tags are wireless frequency tags that allow companies to tag and track their products. However, according to a recent survey completed by Fusion Consulting, many companies in the southern part of China are not aware or did not understand the benefits of RFID technology in the retail market.
According to Stephen Wong of EPCglobal Hong Kong, one of the main reasons why companies in South East Asia are slow to embrace RFID is due to the availability of cheap labor in China. However in western society, RFID technology has reduced labor costs leading to increased profits.
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