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China as a global supplier to the world | Old and new situation when purchasing from China

In today’s ever evolving and fast changing business landscape, I believe it is good for me to share my knowledge on how people could purchase almost anything from China. Let it be for machinery, food, beverages, automobile industry or any other industry you can ever imagine – China has any products which could be sourced at a relatively reasonable price.

As the scope of this topic is too vast to explain in one article, I have decided to break up the article into a set of series so that it is easy to digest an understand. Therefore, let me start this series of article with giving you an outline of the already existing and new situation when purchasing raw materials from China.

Let me provide you a break of how it looked like when the world purchased from China:

  • Low cost of labour – As mass production was happening, most of the producers were experiencing economies of scale which helped reduce the price of labour as production increased per unit.

  • Government support – The government of China was extremely supportive to many of the Companies which initiated many to get into the export oriented business which helped drive valuable foreign exchange into the economy and strengthen the currency further

  • Quantity focused rather than quality – It was evident that ‘made in China’ products were about the best price point rather than the quality. This was the perception China built to deliver bulk units at a relatively reasonable price.

  • Low technology – Back in the day, China was focused on supplying to the world through labour. With its big population, China had sufficient manpower to produce and supply to the world.

  • No certification requirement – At the time, certifications were not mandatory when purchasing products. As such, not a big focus was given on standards and certification by Chinese suppliers.

The above were some of the points which many traders with China experienced in

the 1980’s, 1990’s and early 2000’s. Beyond this we have seen that the world has advanced in a very fast pace thereby changing many of the above factors. Fast forward the time to 2022 most of the above mentioned behaviors have changed for good. China may still be one of the largest suppliers to the world market, but the level of operation has changed altogether. Some of the new changes in behavior are as follows:

  • High labour cost – With the advancement in technology and catering customized offerings to customer segments from around the world, labour cost has seen an increase. Also, with people moving up the socio economic life style, a higher salary is demanded.

  • Market oriented products – As opposed to the standard products which consumers used to buy and adapt themselves into, most of the products are now based on the demand of the market.

  • High focus on quality while keeping inline with the quantity – Unlike in yester years, quality is playing a key role. Infact, quality is playing a center role with many customers now demanding quality while being ok to spend more for high quality

  • Technologically advanced – The development of technology over the past years have significantly impacted production. Unlike industrial revolution, companies are now leveraging on artificial intelligence and big data to uncover patterns and cater accordingly thereby enabling market focused products to be put out.

  • Human centered design thinking – China is now leaning towards understanding pain points of customers in their respective user journeys. While understanding these pain points, manufacturers try to mitigate these pain points by many ways including innovating and coming up with entirely new products.

As seen above, the landscape of business in China has changed drastically over the years. It is not your simple place to purchase your product, yet a more sophisticated business environment to deal with.

Tecpacking too is a prominent machinery and material supplier to the global tea and coffee market. Over the years as a key exporter we have experienced a paradigm shift in trade driven through customization and technology. Well versatile with new technology, Tecpacking has enabled to keep abreast of trending pratices.

In the next episodes I am hoping to uncover more details pertaining to purchasing from China.

Stay tuned!

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