(Yicai) Feb. 22 -- Walmart’s proposed takeover of Vizio could benefit the US TV giant’s contract manufacturers in China, as the world’s largest brick-and-mortar retailer promotes the brand, spurring sales, an industry insider told Yicai.

Vizio TVs are more popular than Walmart’s brand ONN, so Walmart will probably roll out more Vizio TVs, boosting sales and benefiting Vizio’s suppliers on the mainland, the person said after Walmart announced yesterday that it plans to acquire Irvine, California-based Vizio for USD2.3 billion.

Walmart’s demand for TV manufacturing services is likely to grow after the acquisition, as the Bentonville, Arkansas-based company will look to reduce costs through economies of scale, said Chen Hui, general manager of market research firm AVC Revo.

Supplier integration is likely to be a key step after the takeover, the person said. Walmart will probably ask its suppliers, which include Shenzhen-based MTC and KTC Technology as well as Mianyang-headquartered Changhong Electric, to vie with Vizio’s suppliers, which include Taiwan’s Innolux, the mainland’s BOE Vision Electronic Technology and Hong Kong’s TPV Technology, to bid for projects.

Contract manufacturers in Taiwan will likely have less of a share in the North American TV manufacturing market, said Chen. Taipei-based Hon Hai Precision Industry was Vizio’s second-largest shareholder before the acquisition. Vizio’s other Taiwanese shareholders, such as Innolux and Amtran Technology, will not have a close relationship with Vizio after the takeover.

North American TV retailers ordered 24 million TV sets to be manufactured last year, up 37.3 percent from 2022, according to AVC Revo data. Walmart’s ONN accounted for 24.4 percent of these orders, making it the largest TV customer in the region, while Vizio accounted for 18.6 percent, ranking second.

Editor: Kim Taylor