Once when it came to sourcing from Asia, China was the first name that popped into one’s mind. It was the sourcing hub of Asia. But gradually this scenario is changing. Many businesses are looking for alternative marketplaces. First, the US-China trade war affected the Chinese supply chains and next, the COVID-19 virus has shaken them terribly. If you have been buying products from China for years, it is the right time to think about a diversified sourcing strategy and alternative sourcing markets. Over the last few years, many companies have been trying to improve their supply chain as it is the base of any business. Even some companies have developed crisis management teams to take care of their supply chains. To deal with this delicate situation, businesses need to evaluate the impact of the disruptions caused by the US-China trade war and the aftermath of the pandemic.
If you want to stick to sourcing in Asia, there are some marketplaces, which are emerging as top contenders to China. This blog has listed five such marketplaces that you can consider for replacing China. Keep reading the blog to learn more in detail.
- Malaysia
European and US companies consider Malaysia as the second most preferred Asian country, next to China. It offers ample opportunities for sourcing and expanding sourcing. Also, Malaysia enables businesses to improve sales and operations in a limited period.
Malaysia is the third-largest economy in Southeast Asia. Worldwide it is known as an upper-middle-class economy. According to multiple surveys, the top 10 exports of Malaysia have accounted for approx four-fifths (81.2%) of the overall value of its global shipments. The country follows an open and flexible approach to trade and investment. All these reasons have made it a vital alternative to China.
Some key benefits of sourcing from Malaysia are:
- No value-added tax or VAT
- Favorable geographical location
- Skilled and experienced workforce
- Thailand
The World Bank has revealed that Thailand possesses an infrastructure that is similar to China. It can arrange international shipments and their timelines. Over the last years, the Thai government has been working on Plan Public-Private or PPP projects. The tentative year of ending the projects is 2027. These activities are helping Thailand to be a remarkable hub for sourcing in Asia. The country has a world-class infrastructure and an efficient workforce.
- India
English is one of the official languages in India. It is one of the main reasons, which have made the country a favorite sourcing destination for foreign companies. Easy communication, a plethora of raw materials, political stability, and an abundance of the workforce are some other vital reasons working behind the emergence of India in the global sourcing sector.
- Indonesia
Indonesia’s geographical position has made it an attractive place for sourcing. It is the second-largest economy in Southeast Asia. A remarkable infrastructure, favorable geography, and educated workforce have made this country an ideal place for sourcing from Asia.
- Vietnam
Vietnam, a small country, has managed to make a remarkable place in the global sourcing industry. The country is rich in natural wealth and exhibits an abundance of raw materials and workforce.
Bottom Line
While planning for replacing China in sourcing goods or services, you can consider these five options. You should do proper research work before taking any decision.