There are pros and cons to every business decision, and offshore manufacturing in China is no exception. Whether you're just starting out in business or you're looking to relocate your manufacturing operations, it's important to weigh all the advantages and disadvantages before making a decision.
But do you ever wonder why most of the world’s biggest brands are choosing to manufacture their products in China?
Well, there's a good reason for it!
According to the National Bureau of Statistics of China, "In 2022, the Chinese manufacturing sector generated over US$17.39tn and is expected to grow by US$19.22tn with an average growth rate of 3.39% by 2025."
Now, that's quite some impressive numbers!
But don't just fall for the hype – let's take a look at the pros and cons of offshore manufacturing in China. Find out why overseas manufacturing using Chinese factories has proven successful for many tech startups and manufacturers over recent years while taking all potential risks and rewards into account. By laying out the facts here, you can make an informed decision about whether or not bringing your product manufacturing to China is a good move for your company.
The Pros and Cons of Offshore Manufacturing – Does China Really Worth It?
Every business is a calculated risk, no matter how large or small. There are always both pros and cons associated with each decision that a business makes, and it is important to weigh these options carefully - same with offshoring to China!
No matter how confident you may feel about an investment or venture, there is still potential for failure and complications. While offshore manufacturing in China, it pays off to be optimistic but not naive – understanding the probability of both pros and cons can help savvy entrepreneurs make smart decisions that lead to a successful venture.
Being optimistic is important, but being informed is even more so. Putting your efforts into research and understanding the emerging trends of offshoring in China will pay off big time.
We know that while thinking about manufacturing in China you must be worried about some rumors like "Manufacturing is moving out of China." Or "China is not as competitive as it used to be."
To all those entrepreneurs and businesses who are still in two minds - China is still one of the most attractive countries for manufacturers and tech startups. There is no doubt that several other Asian countries like Bangladesh, Vietnam, and India are now offering cheap manufacturing options, but none of them has China’s scale, infrastructure, and maturity.
Interested in learning more about offshoring to China - check out our latest blog post!
Latest Blog Post: Offshore Manufacturing in China
Top 5 Advantages of Offshore Manufacturing – All You Should Know
“No risk, no gain.”
Overseas manufacturing in China is quite beneficial to numerous businesses and can help your business soar.
But for this to be possible, you must understand the advantages and disadvantages of overseas manufacturing.
So, let's explore the top 5 advantages of offshore manufacturing in China:
1. Reduced Production Cost
Starting with the most obvious benefit - cost savings.
Yes, you heard it right!
High-quality and affordable manufacturing is what China has become popular with over the years.
Leaving the pool of Asian manufacturers, Chinese manufacturers are now competing against the US and European manufacturers - in terms of product quality, pricing, and customer service!
The Other Side:
You might hear a lot of News like, "China is no longer cheaper."
Now you might find it surprising but it's true!
After the "Made in China 2025" initiative which started back in 2015, Chinese manufacturing shifted drastically from producing low-cost cheap products to innovative high-quality affordable products - that's what everyone wants!
However, even now China still remains the most affordable option and gives you a competitive edge over other countries when it comes to production cost.
Still curious about how much does your product cost in China - Check our pricing guide!
Pricing Guide: Manufacturing Costs for Custom ODM products in China
2. State-of-the-art Manufacturing Centers
Thinking of cheap and inexperienced labor with outdated machinery?
Well, forget about that!
That's not China anymore.
China is now home to advance manufacturing centers equipped with qualified engineers and high-end technologies.
Plus, you’ll be pleasantly surprised to know that Chinese manufacturers never compromise on product quality - they are certified and compliant with all international standards.
So, don't hesitate to rely on China for offshore manufacturing - your product is in safe hands!
3. Quick Turnaround with Worldwide Delivery Availability
Still think about, "Slow and steady wins the race?"
Well, that's not true anymore - especially in the world of manufacturing.
No one is going to wait for months to get their product!
That's why Chinese manufacturers are now producing products faster than ever without compromising on quality.
Moreover, their state-of-the-art logistics centers make it possible for them to deliver the products globally.
So, no more worrying about late deliveries!
The Hidden Side:
By offering quick turnaround at low cost, most of the fake manufacturers have tricked unsuspecting customers. They always try to lure them with their attractive packages.
But how to suspect these cheaters?
The Right Way:
Never choose a manufacturer who never says “NO” to any of your requirements. Instead, look for manufacturers who point out impractical and risky ideas and suggest a better solution.
Also, make sure to do your research before selecting the manufacturer - else you might end up with the wrong one!
So, interested in learning more about how to find reliable Chinese suppliers - Check out our latest read!
Latest Read: Facts about Chinese Suppliers
4. Wide range of Suppliers
China is house to over 441 thousand factories and that's the reason why China named as "World's factory."
Now it's up to you - choose whichever works for you!
Plus, the categories of manufacturers range from large-scale production centers to SMEs (small to medium-sized enterprises).
But wait - so many options bring so much confusion!
The Right Way:
Don't be swayed away by the number of options. Instead, narrow down your list according to their production capabilities, pricing, product quality, certifications, customer reviews, and many more.
Plus, always make sure to have a multi-level assessment process to select the right manufacturer.
But we know, you must be thinking, "It will take so much time and effort!"
Well, it will.
And there might be a possibility that you ended up making the wrong decision.
To avoid that, we recommend you to partner with a reliable Chinese contract manufacturer who will help you throughout your offshore manufacturing project in China.
Don't know much about contract manufacturing in China - Here is our latest read!
Latest Read: Chinese Contract Manufacturers
5. Professional and Qualified Staff
Chinese industries boast some of the most professional and qualified staff in the world.
With a commitment to lifelong learning and an eagerness to excel, Chinese workers are voraciously driven to succeed in their craft. This incredible dedication can be seen across many industries, from factory workers to mechanized engineers.
Yes, you got it right - that's the reason why more and more companies are planning to offshore their manufacturing operations to China!
So, these were the major benefits of outsourcing manufacturing to China. Now let's put some light on the drawbacks.
Top 5 Disadvantages of Offshore Manufacturing in China
Everyone talks about benefits but an honest assessment should include disadvantages too.
After all, understanding the cons is much more important while planning an offshore project!
How can it help you?
By understanding the disadvantages, you can prepare yourself to face these challenges and unlock the true potential of the Chinese market.
So, here are the top 5 disadvantages of outsourcing manufacturing to China:
1. Differences in Business Culture
Every country has its own set of business cultures and laws.
So, it is important to understand the differences in cultural and legal parameters to ensure the smooth functioning of the operations.
You should know that China has its own work ethics such as guanxi (关系), which is different from the western view and might be difficult to understand.
What Can Go Wrong!
There are tremendous repercussions if these differences in business culture are not addressed, as production delays could occur due to misunderstandings around payment methods or pricing agreements.
What if we tell you that you can avoid this trouble by partnering with a China-based contract manufacturing company with a Western background?
Yes - that's true!
MorphoMFG is a China-based contract manufacturing company backed by a Western young man Joshua Fairbairn (CEO of Morpho) who speaks fluent Mandarin and has more than 7 years of manufacturing experience in China.
Along with a team of more than 40 multi-talented professionals, Morpho is your one-stop destination for all things - from sourcing and production to quality control and delivery.
2. Quality Control Issue
Quality control is one of the major concerns when it comes to overseas manufacturing.
It can be difficult to verify product quality if you don't have a team of experienced quality assurance inspectors onsite.
One of the most common traps of Chinese overseas manufacturers is they deliver a high-quality prototype or sample just to impress buyers and then switch to a low-quality product once the order for mass-production is placed.
To avoid such traps, you should take extra precautions and employ a reliable Third-Party Quality Control (TPQC) inspection service - in case you don't have the in-house resources.
Luckily, MorphoMFG has its own team of experienced QC inspectors who are trained to inspect the quality of each order to make sure you get the desired outcomes!
3. Language Barrier
It is common for language barriers to creep in while dealing with Chinese manufacturers or subcontractors.
This can lead to communication problems and delays in production due to misunderstandings.
Don't just take it for granted!
It is important to understand that the language barrier can make it difficult for you to explain your ideas, ask questions and get the job done!
Suppose you are a native English speaker who wants to communicate with a Chinese manufacturer - how will you do that, if neither of you know the other's language?
Ahh... Nah just kidding!
The best way to avoid the language barrier is to partner with a contract manufacturer which has a team of bilingual experts such as MorphoMFG. They will be able to understand your requirements and communicate them properly with the Chinese manufacturer.
That's how contract manufacturing in China is done right!
4. IP Protection Issue
Well honestly, IP protection is a big deal when offshoring to China.
You might think - why would someone steal my ideas?
At some point, you might be true why would someone put a lot of effort into stealing your idea and developing its marketing plan when it's not even sure of success.
But the fact is - what if your product went viral?
Then it will be too late because you already sent your complete design files to the Chinese manufacturer and you have no control over them.
Now, everyone wants to grab a piece of your success and you are helpless!
To avoid such issues, firstly you don't need to send your complete design files to several Chinese manufacturers - that's a big NO.
Just look for a reliable contract manufacturer who uses Component Control Method, hand it over to them, and relax!
But what's the Component Control Method?
Basically, this method is used by MorphoMFG to keep the customer's design files safe and secure. The company divided your product into several components and then assign them to the related factories - specialized in that component manufacturing.
This way, no single factory will have the whole design, which makes it nearly impossible for someone to steal your IP.
Isn't that amazing?
Yes, it is!
You can learn more about our Component Control Method in our latest blog post.
Latest Blog Post: Why You Don’t Need to Find Just One Manufacturer in China
5. Fake Manufacturer’s Trap
As we have discussed earlier, there are thousands of manufacturing facilities in China.
But the problem is - all of them are not reliable!
Fake and non-professional manufacturers took advantage of the existing opportunities and started offering low-cost services to attract buyers.
Then what should you do?
Don't just believe the words and online reviews - do your own research and visit the factory yourself.
It is also important to look at their technical capabilities, capacity, certification, etc.
But what if you are offshore?
In such a case, you should partner with a contract manufacturer who will do all these steps for you. They will be responsible for everything from factory sourcing to product inspection and delivery.
While you can remain stress-free and focused on your product marketing - a dream of every business owner!
So, these were the few challenges based on our real-life experiences that you might face while contract manufacturing in China.
Now have a quick look at how MorphoMFG can bring a lot of business value to you by providing an end-to-end manufacturing solution.
Worried about Offshore Manufacturing in China – Hand it to Experts
After going through all of the pros and cons of offshore manufacturing in China - especially the disadvantages!
You might think that it's a risky business. And you might not want to get into any kind of trouble.
Well, in such cases - don't do it yourself!
Just hand it over to the experts who already have the required skills, knowledge, and experience of manufacturing from China.
MorphoMFG is one such contract manufacturing company that you can trust in this matter.
With +7 years of manufacturing experience and a pool of hundreds of active manufacturers, we are here to help you bring your product from concept to shelf.
We will also provide you with IP protection and oversee every other process from product design to final delivery.
Services offered by MorphoMFG:
- Manufacturer onboarding
- Product design and development
- Prototype development
- Mass production
- Quality control
- Shipping and logistics
But how to get started?
Just schedule a call with our experts today and discuss all of your requirements in detail for a quick consultation and quotations.
Interested in learning more about our services and previous clients - Visit our homepage, now!
We will be more than happy to help you out with your overseas manufacturing needs in China!
Frequently Asked Questions
Is China Suitable for Offshore Manufacturing?
Offshoring manufacturing to China can be a great way for companies to reduce their production cost; however, it is not always an easy decision for those who want to venture offshore.
The Hidden Side:
You might face several challenges and it can be hard for firms to articulate their product expectations and standards from vast distances.
Don't worry - there's a solution!
Hand over your offshore manufacturing project to experts like MorphoMFG. We will make sure that your manufacturing venture turns out to be successful and cost-effective.
So, don't miss out on the opportunity and schedule a call with us, today!
How much does Offshoring Cost in China?
When businesses consider whether to bring their operations overseas, they might wonder how much it would cost to offshore in a country such as China.
The costs of operating offshore are generally lower as compared to wages, property costs, and other overhead expenses, domestically.
Didn't get that point?
Suppose you already have a smartphone manufacturing unit and now you want to launch a smart watch in the market.
How much will it cost to set up a new production line for smart watches in your country?
Well, a lot, or maybe in millions!
On the other hand, if you outsource your smart watch manufacturing to China - it will cost much less compared to setting up a new production line in your home country.
The Best Part:
By doing this, you will get access to world-class quality and cost-effectiveness in product design, development, prototyping, and delivery - without taking any stress for the whole process!
So, what are you waiting for? Reach out to MorphoMFG now and let us take care of the rest!