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Sourcing Outside of China

With the recent US-China trade war and the latest coronavirus outbreak it may seem reasonable to consider other sourcing options, such as India or Taiwan.

Sourcing in India

Key product categories

  • Home décor and home products (textiles, kitchenware, ceramic, cotton)
  • Fashion (Jewelry, bags, scarves)
  • Apparel (knitted and woven cotton products, silk)
  • Leather (shoes, wallets, belts)

Advantages of sourcing in India

  • Ease of communication

English is one of the official languages of India, making the country much more international in terms of doing business.

  • Unique, differentiated products      

India specializes in producing unique and handcrafted products not found in other countries.

  • No import tariffs

India is not in a trade war with the US, so there will be no impact on  e-Commerce sellers importing from this country.

  • Place small orders

Since a lot of the products are handmade, India suppliers are usually willing to cater to small orders.

While minimum order quantities typically range from 200-500 units, suppliers cater to orders as low as 20-50 pieces (with the exception of apparel and textiles).

Disadvantages to sourcing in India

  • Infrastructure

Infrastructure development is greatly lacking in India as it ranks well below China in terms of the World Bank’s Logistics Performance Index. It also ranks lower than Thailand, Vietnam, and Malaysia in terms of infrastructure.

  • Government system

Another concern for India is its large geographic size and relatively decentralized governance system, which can complicate business dealings. Sourcing from different regions in India could bring very different concerns, legal requirements and challenges.

Sourcing in Taiwan

According to data from the International Monetary Fund, Taiwan is almost three times as productive as mainland China. In terms of electronics, plastics and household goods Taiwan is an attractive alternative to China.

Key product categories

  • Electrical machinery, including computers.
  • Plastics, plastic articles.
  • Optical, technical, medical apparatus.
  • Knit or crochet fabric.
  • Cutlery, household products

Advantages to sourcing in Taiwan

  • Technology

Taiwan has been a true “shining star” of the technology sphere for the past few decades. Domestic companies produce a vast range of items, from desktop computers, tablets, flat screens and phones, to motherboards, graphic cards and servers.

  • Logistics network

Taiwan has well established shipping ports both in the north and south of the island. These serve as hubs for many international shipments, and almost all reputable logistics companies have a branch office in close vicinity.

  • Ease of doing  business

Taiwan is  far ahead of China in this regard: only Singapore and Hong Kong rank higher overall than Taiwan on ease of doing business in East Asia.

Disadvantages to sourcing in Taiwan

  • Prices

Expect to be paying nearly 30% more than what you would be paying in China for factory man-hours, tooling & molding and per-unit costs.

To be continued

Sources: marketsourceasia.com, eds-international.com, junglescout.com, intouch-quality.com,  wearegrowthhack.com, webretailer.com