Most companies of the world, whether it is small-scale or medium scale as well as a few top brands like Apple have over the several years realised how important it is to source their goods from a country like China. As a result, China produced around 28% of the automobile output of the world in 2019.
China has become a popular destination now for many other industries looking for a certain trustworthy OEM (Original Equipment Manufacturers). If you have done your homework right, then sourcing products from any Chinese producers will help you increase your profit margin, cut your labour costs, and also guarantee a steady supply for many years.
Unfortunately, myths and falsehood still exist about “Made in China” products. People claim that China does not produce anything of good quality. However, the reality is that outsourcing from China is the best choice.
Shenzhen (SZ) the southern city of China may not be as well-known to you as Hong Kong, Beijing, or Shanghai, but it is this “migrant city,” with its modest beginnings, that has been expanding rapidly over the past few years as the business place to be. This is especially true for people from outside of China who are looking for the best regions and cities in Asia to set up a company.
Shenzhen, founded in 1979 by the eminent statesman Deng Xiaoping, has expanded rapidly over the past 35 years. It is now one of China’s most powerful cities and one of the country’s first and most prosperous Special Economic Zones. Shenzhen’s rise to the even greater honour and glory does not appear to be slowing down any time soon.
Shenzhen was rated the most attractive city in China to become a Shenzhen sourcing company for business as per the research results released by the Chinese Academy of Social Sciences early in May of this year, surpassing Hong Kong and unseating the commercial powerhouse for the first time in ten years.
The survey was conducted for 294 cities across China which also included Taiwan. It has recognised the focus on innovation of Shenzhen and the huge financial support and investment that was made in this city in developing organizations and technology.
Shenzhen’s commitment to innovation may be one of the key elements propelling it forward, but it is not the only one.
Let us see a few good reasons for sourcing products from China, and especially consider creating your Shenzhen sourcing company.
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Expansive supplier base
The Chinese supplier base is vast and also one of the main reasons for choosing to import from there. China has in fact built the most diverse supplier base when compared to the entire globe.
You may find a wide variety of sourcing companies for manufacturing almost any kind of product, from garments and textiles to electronics and consumer products.
China features a variety of industrial clusters, each with a sizable number of businesses concentrated in a certain region. Shenzhen as an example is meant for manufacturing electronics goods.
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Lower labour cost
The reason China is able to create all items at such a reduced cost is one of the most essential questions that people ask, and the answer is the lower cost of labour in China. In the manufacturing sector, labour costs are a significant factor in determining overall production costs.
Given that China has one of the highest population in the world, it is very easy to locate both skilled and unskilled labour locally. Any companies in China are able to establish lower manufacturing costs because of the availability of abundant local labour.
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Reasonably good product quality
It is a general misperception about Chinese goods are that they are not long-lasting. Chinese products are known as use-and-throw products. However, this notion is fading away over time. A number of small and medium-sized firms have already discovered suppliers producing products with “Made in China” labels that are of pretty good quality.
Due to years of practical production expertise, they are extremely familiar with the manufacturing process. Additionally, they are aware of the best and most affordable places to buy high-quality raw materials, and they may even already have the tools necessary to uphold a high standard of quality.
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Better scaling capabilities
Over the years, China has built a strong and well-established infrastructure. Most Chinese manufacturers also have got extensive knowledge and experience in the global supply chain. These 2 main elements offer them the flexibility to enhance production levels as required. As an example, if you establish a Shenzhen sourcing company you can increase the production capacity of any electronic products very rapidly.
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Economic and tax incentives
Shenzhen has benefited from specific economic policies and adaptable government initiatives as an SEZ, which have contributed to its development as a global financial powerhouse.
Foreign businesses that have invested in the SEZ benefit from tax breaks that make locating there an advantageous decision.
If you have a Shenzhen sourcing company then you get the benefit of:
- Lower labour cost
- Lower rental cost
- Closer proximity to mainland Chinese manufacturing
- Lower corporate taxes for businesses
- Many financial incentives offered to businesses and individuals
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Industrial and design parks
To accommodate industrial and design parks, Shenzhen has specifically fenced off some regions within its borders.
- Shenzhen Hi-Tech Industrial Park
- Shenzhen Software Park
- Sino-Finnish Design Park.
As they serve so many diverse businesses, these parks are great incubators for companies. This creates the ideal framework for business partnerships between domestic and international players, encourages healthy rivalry, and leaves a potential for even more innovation!
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An access point to the rest of Asia
One of the top reasons to establish a business in Shenzhen is its strategic position, which has made it China’s largest manufacturing base.
However, it is important to note how easily accessible the rest of Asia is from this China’s most competitive metropolis.
You may access the rest of South East Asia considerably more easily by establishing a Shenzhen sourcing company. Shenzhen’s strategic location and several ports—the third busiest container port in the world—allow trade between some of the most populated and developed nations in the world, including India, Indonesia, and Australia.
Conclusion
Businesses must concentrate on boosting their profit margin without lowering product quality or increasing their production costs in an intensely competitive global market. Because of this, a sizable percentage of businesses worldwide favour sourcing goods from China and having a Shenzhen sourcing company.
