China has achieved the status of the factory of the world over the last decade and businesses from everywhere in the world are now trying to source their products from this country. Not only any small or medium-scale businesses, but also large companies are also trying to source their products from China.
No wonder these days most of the world-famous branded products are also bearing the tag of Made in China. These products can be almost anything whether any consumer goods, industrial products, electronics, machinery, equipment, etc.
Do you know why all industries are trying to source from China for Europe, the USA, and many other countries of the western world? Let us try to explore the various reasons in this post.
1. The growing economy of China
The fact that China has established itself as the world’s second-largest economy. It recently demonstrated why it is currently the biggest manufacturer in the world.
For the past two years, it has been recognized as the nation with the greatest industrial influence. The economy of this nation is expanding quickly, therefore sourcing the goods may be a wise move for any business owner.
Speed-to-market has become more important as a result of how quickly trends emerge and fade, thanks to the internet. When you consider accelerating your supply chain, China’s integrated supply networks represent a significant benefit.
Because of the availability of the following difficult-to-match resources, China’s production ecosystems can accelerate further.
- Assembly factories
- The concentration of several input suppliers
- Skilled workers
- Service providers
3. Expansive supplier base
The reason why several successful businesses of the world import commodities like electronics, toys, textiles, and more is that Western companies can benefit from an enormous network of suppliers available to source from China for Europe.
4. Reducing the risks
Whenever you decide to buy products from China, then you choose a carefully planned sourcing strategy that will enable you to minimize any potential risks. When you purchase goods from China, you will be actively involved in each stage.
This will then enable you to receive early alerts of fraud risks, inflated profits, and late deliveries so that it is possible for you to take action to effectively mitigate them.
Finding better value at a fair price continues to be a sourcing goal even as other factors become more important. China has reached a point where its growing productivity and also quality gains are sufficient to partially offset the consequences of its rising compliance, labour, and property expenses.
A major factor in China’s improving productivity is the country’s rapid automation.
6. Minimum order requirements
To achieve the demand for MOQ (minimum order requirements), a sizable expenditure is necessary. Start-up businesses lack the resources to invest in a large number of items and adequate strategies. Buying goods from a source from China for Europe may be a better choice because it does not require small businesses to make significant investments in them.
7. Better scaling capabilities
China has a strong, well-established infrastructure. The majority of Chinese manufacturers have extensive experience and knowledge of the global supply chain. These two elements provide them the flexibility to increase production as needed.
For instance, in only a few weeks or even days at most, you may boost the number of products you source from a few hundred to over a million. The length of time it takes to scale up may, of course, vary depending on the nature of the products and the accessibility of raw materials, etc.
Partnering with a China PEO would help you to understand the market and streamline all the processes around China.
8. Auditing of the facilities offered by Chinese suppliers
Successful business companies are primarily recognized for the premium goods they provide to their clients. The key to success is the business owner’s visit to the supplier’s facility to evaluate the goods’ calibre.
Chinese businesses offer to analyse the effectiveness of the factory’s audit management systems during a visit. This enables the business companies to determine whether or not the factory is real, actually running, and able to produce the required goods.
Environment and social responsibility is becoming essential for sourcing teams as a result of consumers’ increased demands for products that are manufactured ethically and the internet’s ability to instantly make or ruin a brand’s reputation
Finding inspection companies and suppliers with experience in satisfying international compliance standards is very simple because of China’s developed export sector.
10. Direct sourcing
Buyers frequently deal with many parties, or middlemen, while outsourcing, which causes delays and raises sourcing costs. However, you can interact directly with the producer when procuring goods from China.
China’s OEM market is fiercely competitive. Hence, as a result, in order to avoid the higher cost of using multiple middlemen, the majority of producers prefer to work directly with the purchasers.
Through online research, by physically visiting different Chinese markets, or with the assistance of an expert sourcing agent, you can quickly establish contact with a reliable source from China for Europe at international trade fairs. Make sure to work with a reputable, knowledgeable manufacturer.
If you are just growing better at sourcing any wrong items, speed alone will not be desired. Responding fast to consumer preferences is key to unlocking profitability. For example, you should make your buying and production more demand-driven to reduce inventory issues and increase your ROI (return on investment).
The practise of “near-shoring,” which involves locating production close to end-users, is another way to increase agility. This has typically meant leaving China and migrating closer to the US or Europe. However, the focus of global consumption is moving eastward.
It should not come as a surprise that China continues to be a global leader in manufacturing despite its rising expenses. It is becoming more and more apparent that sourcing involves more than just looking for low prices. Other factors are increasing what drives competition.
It will also offer a lot of advantages for businesses of the western countries to appoint a trusted sourcing partner in China, who can help them to identify the right source from China for Europe. A sourcing partner can offer help for professional product sourcing and also ensure that shipping from China is done well on time.