Low-Cost Countries Sourcing (LCCS) is a procurement strategy used by companies to source materials, goods, and services from countries with lower labor and production costs to reduce expenses and improve profit margins. The countries identified for LCCS can vary over time due to changes in economic conditions, labor costs, political stability, and other factors. Here are some commonly recognized low-cost sourcing countries and what they are best known for in terms of manufacturing and sourcing capabilities:

#1 China

China is a crucial manufacturing hub for the world. Their companies offer skilled workers, vast supply chains, operational efficiency, and low production costs. Chinese companies leverage their economies of scale to reduce their production costs significantly. It has an extensive business network of suppliers and manufacturers. This provides companies with the ability to reduce the cost of production and ensure timely delivery of the assembled units.

#2 India

India became one of the preferred destinations for global sourcing based on its booming economy, the presence of diverse talent, and other factors. The country also provides vast market opportunities. It has well-qualified IT, engineering, pharmaceuticals, and BPO professionals. Businesses can benefit tremendously from the cheap labor available. The firms also benefit from the English-speaking population, which can easily communicate with foreign business partners. In addition, India is one of the largest economies with a robust legal system that protects the rights of foreign investors and ensures stability.

#3 Vietnam

In the fast-evolving global sourcing landscape, Vietnam has emerged as a prime destination for businesses seeking a competitive edge and valuable partnerships. It has a great location and a fast-growing economy, and its expert workers offer manufacturers cost-effective production. The country’s strategic position in Southeast Asia offers easy market access to many countries, making it a perfect hub for international trade.

#4 Bangladesh

Bangladesh is changing the world’s sourcing industry. It’s due to its unique position and competitive price advantage that the businesses here offer. Businesses looking at Bangladesh for their procurement needs enjoy its proximity to the major markets, including the central Asian markets. Sourcing in this country helps shorten the lead time and reduce the transportation costs. Being very populated, the government offers manufacturers the chance to access a skilled labor force at moderate pay. Bangladesh has become a top destination for sourcing textile brands. 

#5 Indonesia

Indonesia, an island in Southeast Asia, is a significant player in global sourcing. It has a population of more than 270 million and offers a highly skilled labor force for those needing human capital. This country provides a sizable industrial basket. It covers textiles, footwear, electronics, and auto parts. This makes it an excellent place for companies seeking affordable manufacturing.

#6 Mexico

Mexico, which has adopted the global sourcing approach, is becoming an aggressive competitor in manufacturing. Due to its location, skilled workers, and trade pacts such as the United States-Mexico-Canada Agreement (USMCA), Mexico has a niche as a competitive manufacturing hub. The proximity of the countries to the United States gives them an advantage in logistics by shortening supply chain lengths and, hence, transportation costs.

#7 Turkey

The manufacturing sector of Turkey is quite competitive due to its location and experienced labor. Turkey’s geographic position and robust manufacturing sector are essential for the company trying to diversify its supply chains. The country has a skilled labor force, modern infrastructure, and a varied industry portfolio. This makes it a top choice for companies that need low-cost production solutions.

#8 Thailand

Thailand is on its way to emerging as a critical player in the world’s manufacturing segment, replicating Turkey’s achievement in sourcing. The country provides a comparative advantage to companies looking to diversify their sourcing processes, especially in Southeast Asia. The nation has good roads, a skilled workforce, and a business climate that’s friendly to investors. These advantages help it attract foreign investors. 

#9 Philippines

The Philippines has a strategic position in Southeast Asia and has become vital in the world sourcing market. A country where many workers are educated and proficient in English provides an edge to companies seeking offshore business transactions. This cultural linkage with ‘Third World’ nations enables an easy partnership with Filipino partners.   

#10 Pakistan

Digitalization has pushed Pakistan to be a leading player in the world of outsourcing because of its growing tech-savvy workforce and strategic location. The nation offers cheap outsourcing in many sectors, like IT, software, customer support, and business processes. Besides, Pakistan’s time zones are close to many European countries, enabling real-time collaboration and effective project management.


China still stands out as the top nation for picking a cheap country for global sourcing. It competes closely with up-and-coming players like India and Vietnam. Besides Bangladesh, Indonesia, Turkey, Thailand, the Philippines, and Pakistan are potential cheap sources for OEMs to tap into. Businesses using optimized supply chains need to analyze. They must check compatibility with these countries’ labor markets, infrastructure, and political systems. This is vital. Picking up the best low-cost nation can lead to much cost-cutting so you can be the best in the world market.

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