Why Global Businesses prefer to Source from China?

POSTED ON July 13, 2021

Businesses of all sizes from across the world source their products from China. From automobile to electronics and appliances, industries across niches turn to China looking for quality Original Equipment Manufacturers. This is not without reason. There are various benefits of sourcing from China, both for new product development or importing regular products. Here are some key reasons why China has emerged as a hub of global sourcing.

Favorable business environment

Businesses cannot operate in isolation. There are several forces such as economic conditions, government policies, investors, network of suppliers, and several others that combine to make a thriving and conducive business environment. Over the past few decades, Chinese business environment has evolved leaps and bounds to support manufacturing supply chains, boost exports and promote ease of doing business. Even the biggest tech giants of the world such as Apple have leveraged the supply chain efficiencies of China to their immense benefit.

Huge network of suppliers

Any product you have in mind, you will find it in China. The country has an expansive network of suppliers across industries such as textiles, electronics, consumer goods, toys, and more. Chinese manufacturers are capable of making virtually any type of product. If you are looking for New Product Development, you will find several OEM and ODM manufacturers that can bring your product ideas to life.

The best thing about the Chinese supplier networks is that most industrial clusters are located within clearly defined geographical areas. These clusters are fully organized and have efficient supply chains. For example, Guangdong Province in China is one of the biggest production centres of cosmetics in the world. A lot global cosmetic brands are manufactured in Guangdong province. Shenzhen is known worldwide to be the electronics manufacturing hub not only of China but the whole world. In the nutshell, thanks to the wide supplier base and their ability to manufacture almost any product on earth, China is the perfect global sourcing destination.

Low manufacturing costs

This is probably the most common and important reason why China is the world’s favourite place for sourcing all kinds of products. Quite often, international businesses wonder how China manufactured products are so cheap. There are several reasons, the key among them is low labour costs. China is the most populous country in the world, and there is no shortage of both skilled and unskilled labour. Low labour costs bring down the total manufacturing costs substantially. There are high work standards in China, which ensure that labour works at full efficiency. This also brings down the cost of production.

Moreover, there are very high production volumes, incredible efficiency and the supply chains are very efficient, this further brings down the production cost. For these reasons, it is hard to beat the Chinese prices. If you want someone to make you a product at the lowest possible cost, you need to find a good Chinese supplier.

Great scaling capabilities

The ability of the Chinese manufacturers to scale up is phenomenal. They can easily scale up as required. This is possible because China has superior infrastructure and well-established supply chains. If you are a start-up that ordered a few hundred products to begin with and now want a few thousand in a few weeks’ time, your Chinese manufacturer would do it for you. Of course, it would depend on a lot of factors such as availability of raw materials and other crucial components.

Superior quality products

Some people still have a misconception that because Chinese products are low-cost, they may be low-quality too. However, this is far from true. The quality of products made in China is at par with those manufactured anywhere else in the world. Chinese manufacturers are capable of manufacturing products to highest standards of design and quality. It all depends on the quality you want and how much you are willing to pay for it. The best of the smartphones, electronics, designer wear, automobiles, and other products that we see around us are manufactured in China.

Ease of sourcing

Sourcing from China is as easy as it can. You can directly contact the suppliers and source your products. In case you are finding it difficult to choose a supplier (there is an overwhelming choice available), negotiate with them or manage the supply chain, you should engage services of a sourcing agent China.

A Chinese sourcing agent can help you not find the right supplier, but they will also take care of all other activities such as price negotiation, quality inspections and shipping. The China sourcing agent will do all this for you for a small commission. So, a local sourcing agent is your best bet if you want a hassle-free sourcing experience.

If you are looking to source a product from China, please get in touch with our China sourcing team now.