March 29, 2019

The Chinese Advantage: Find Out How Manufacturing In China Could Help Your Business

For over a few decades, American, Indian, and Canadian consumers alike have been reaping the benefits of having goods available to them at economical prices through the globally dominating Chinese manufacturing companies.

On one hand where this shift has brought in a great deal of disappointment to the local manufacturers, but a lot of satisfaction to consumers on the other hand, who now have the joy of purchasing power with prices of selective goods colliding immensely.

For those who prefer video content, here’s a video summary of what you’re about to read below.

China – a Manufacturing Behemoth

It is not surprising that China has developed to become a major economic power. The country has witnessed a remarkable change since the government enabled international trade and joined hands with the global market.

Presently, China has evolved to become a giant, so much that the world’s most reputed brands, for a while now, have been outsourcing manufacturing to Chinese factories. One of the primary reasons to consider manufacturing in China is undoubtedly the lower manufacturing cost.

When the manufacturing process is handled externally, specifically for mass-market products, your company can shift its focus on research and development for future launches.

Check out the massive business advantages of outsourcing your manufacturing in China –

1. Lower Production Cost

While working with a manufacturing facility in China, you get the benefit of lowering the production cost without letting it impact the volume output. Cheap production cost has always been the bedrock of China’s manufacturing sector.

This is so because, apart from having cheap labor, with time, China has evolved to form an ecosystem with physical infrastructure and human capital in abundance. This renders to lower production cost and even lower ancillary services like shipping & warehousing.

2. Greatly Reduced Labor Costs

The labor cost in China may be as less as half in comparison to the home market. Since labor is one of the major expenses a company faces for any product or service facility, this indicates that a notable change in profitability can be generated with the decision of outsourcing.

Besides, one of the primary reasons to offer lower-waged employees is because these units have skilled labor, as well as the superlative engineers needed to deliver high-quality products.

3. Quicker Output in Limited Time

Even though the domestic factories in the home market might support limited capacity, however, this is never the scenario with Chinese markets. Once again, low labor costs play an important role in this aspect.

Based on the business requirement, one can hire more labor to complete the required volume production while investing less money than domestic services do.

This model is relatively flexible and, China is well-equipped to cater to the growing demand with a timely output.

4. Global Exposure

If you set-up your base of operations in China, then you naturally get easy access to the Asian and European markets. This provides the opportunity of being able to widen the scope beyond the home market using deliberately targeted demographics so that the business can expand.

To add, the expansion process can be outsourced too for greater ease, especially if there is an absence of expertise in the local market.

To conclude

The key to a consistent manufacturing process is to evaluate your options carefully, and accordingly, take precautions. There are assured financial advantages of outsourcing, but other business factors need to be balanced out.

About the author

Josh Fairbairn

CEO of MorphoMFG, fluent in Mandarin, Blogger, and Youtuber. Josh loves interesting materials and the craftsmanship that goes into creating innovative products - watches, tech, games, whisky, leather, wood, blockchain & electronics. Josh and his team in Guangzhou, China are striving to create (& consume) the world’s highest quality products. Partnering with entrepreneurs globally to help solve the world's problems - whether small or large.

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