Since many businesses are competing in high-traffic marketplaces, a highly connected global economy with a competitive edge is all a company needs.
The price of products is the most significant factor to keep the competition alive in the market. This is because many businesses outsource a bulk portion of their production to countries offering low labor costs. China has set its feet as one of the world’s most prominent manufacturers of notably large portion of products, which is, in fact, highly beneficial for online marketplaces.
China has successfully managed to achieve and maintain its position as the world’s largest producer of goods by attracting a great number of investors through considerably low labor costs. On the other hand, China has experienced high labor costs during its industrialization period that doesn’t let it maintain the cheapest labor cost any longer.
So, what if China no longer offers the cheapest labor costs, why should you consider China to set up your business?
Regarding the manufacturing of products, China wins in benefits over other Asian nations. The most prominent reason is that the knowledge, skills, and experience this country uses to deliver their products and maintain their high standard are what western legislation and consumers require. Chinese labor is very cheap as compared to India; its main trade rival, where increasing inflation has made complexities to compete to the price China has to offer. Therefore, Chinese manufacturing companies have maintained their high efficiency and competition in the international market.
With such efficiency and competitiveness, why should you consider setting up your factory in China?
- A Great Boon for Business Opportunities: Most small business, specifically in the USA, face challenges to find a manufacturer who can fit their budget or handle the required product. However, doing business in China will let you afford the cost of manufacturing; you may even find it cheaper.
- Notably Lower Labor Costs: The most important reason is a significant drop in manufacturing costs. Labor is one of the biggest assets yet cost for any company that produces huge amounts of products regularly. In China, you can make bulk productions at a notably cheaper rate. This will thus allow your staffing condition to be more flexible and productive.
- Accessibility to the Largest Economy: Having a factory in China automatically leads you to other Asian markets, which can sometimes turn out to be a pathway to the European market. It is a great opportunity to create a global presence and gain product exposure and fame. Every year, the manufacturing of different goods increase by about 12 percent in China.
- Product Affordability: Product comparison and competition usually settles on price. If your product has a competition in the American market, manufacturing your goods in China can get at overall lower price point and ultimately more consumers.
- A Gateway to Duplication: In the extensive manufacturing market of China, small businesses can easily save a lot of their precious time. If you are making a product, there are high chances that it may already being made in a part of China. If you have your dimensions ready and aligned, you can create duplicates rather quickly. This benefit is exclusive to Chinese manufacturing market. This may be the reason that about 400 companies international companies are investing in Chinese manufactured products.
- Attractive Market: China showcases a great potential market for international products and services with a land larger than United States and population more than 1.3 billion. Whether you are a huge Western business tycoon with a fine Chinese presence or a startup B2B e-commerce platform with no previous exposure to Chinese market, foreign businesses of all sizes can get attracted to Chinese market.
China is now heading toward the middle class; it is an emerging economy. There may be higher cost for foreign businesses, but they all seem to be comfortable with the fact that the richer and regular market is better than no market at all. The profit margins of international businesses are yet higher than any other market in the world, despite how high the costs are.
- Availability of Skilled Talent: Another, most important, reason and benefit of doing business in China is a vast skilled workforce. The emerging workforce is highly educated. It can be said that more than 6 million people graduate each year from Chinese universities. Even most students are learning English from kindergarten period, so, English is considered to be a significant subject on this land. Therefore, this skilled workforce can manufacture and provide products and services. Now this is the point for foreign companies to consider how to preserve themselves in such a competitive market.
- Access to Better Service Levels: It may not be the same case of everyone, but generally, you must take China’s market seriously to be taken seriously as well. It isn’t essentially applicable if you are opting for domestic manufacturing. If your orders are not big enough for the market, then you may have to look for better ways to do so. These issues are found in every market, in China as well, however, with quite less incidence for small businesses.
- Exposure to More Variety at a Lower Cost: Every business plan revolves around profit margins. You must make money to stay firm in the market. When you are doing business in China, you can avail the opportunity to expand your product range while still keeping as low price points as you may require.
China’s low product and labor costs are known throughout the world, but the benefits in services often remain unrecognized. In the present time, when someone, especially importers, requires value-added and labor-intensive services, Chinese manufacturers, distributors, and logistics service providers respond efficiently. Since China offers cheaper labor costs relative to the USA, it is worth weighing whether a specific service or product manufacturing should be transferred to China.
Wrapping up with the lower costs of products and workforce and keeping in mind a growing selection of highly sophisticated and reliable logistics services you may be ready to explore the Chinese global market and reap its benefits fully.
Despite the ups and downs of running a business in China, this market possesses an excellent potential that may be challenging to be replaced by other countries. Make sure you carefully analyze the market as a priority to stay ahead of your competitors.
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