China sourcing services- advantages and challenges

Posted by sophiasmith on April 2nd, 2015

Attaining a competitive edge is vital in today’s global economy. Since China opened its gate for the global market some twenty years ago, has managed to become one of the leading offshore manufacturing and sourcing hotspots of the Asian continent. Visionary marketers and management officials could not only see China as a vast future market base for their products but also as an effective means to lower their production costs by outsourcing their manufacturing plants to the land of the dragons. Textile, computer and telecommunication equipments form a major part of the western import from China.

In today’s date and time, China’s outsourcing market is estimated to be growing with an avg. annual rate of 30 percent. Some of the primary factors for the successful and dynamic growth of the China’s industrial sector also double up as reasons for business enterprises to deploy their production units to China.

• Maintaining competitive edge with low cost sourcing services.
• Abundance of low cost labour significantly reduces the capital costs up to 30-70 percent as compared to acquiring the same services from developed countries.
• Access to the budding Chinese markets.
• Closeness to the Asian markets.
• Low cost raw materials.
• Excellent infrastructure system.
• Intricate, well grounded logistics across the country.
• Proximity with downstream manufacturers for promotional and intermediary merchandise production.
• Advantages from incentives offered by Chinese manufacturers.

However, apart from the obvious benefits of the practice, there are various challenges involved, including:

• Management of long supply chains.
• Maintaining strict quality control checks.
• Overcoming language and cultural differences.
• Higher property protection costs.
• Commercial laws concerning outsourcing business.
• Brand risk or the leakage of ideas and products in the domestic market.
• Managing operational problems like energy shortages.

All these drawbacks make it difficult for small and middle-sized companies to acquire profits via imports from China. Nevertheless, these shortcomings can be overcome largely by employing reliable China sourcing services such as the likes of Tiger Global to manage your Chinese supply chains and production units. These companies with their experience in the Chinese markets have extensive local network and connections established and are capable to provide you on-ground support and even manage life-cycle supply chains on your behalf so that you are ensured piece of mind concerning your overseas business affair and can focus clearly on other core aspects of your business.