What to Expect
Considerations for China
Risks & Opportunities
- Imports to USA $146 billion
- Increased risks
- Irreplaceable opportunities
1.
Engineering talent
- Complex product designs or “off-the-shelf” options
- Electronics, plastics, high-end apparel, stainless steel designs
- Low quanity orders possible
2.
Supply Chain Network
- Mature suppliers with advanced capabilities
- We have an uparalleled supplier network across broad range of industries
3.
Large Consumer Market
- Build in China if you will sell to China
- Taobao (Alibaba), JD.com, Tmall, Suning, etc.
Lessons Learned
Responding to Supply Chain Trends
01. Don’t go to China just for cheap labor
- China’s labor rate has increased 1000% from 2000 to 2020
- 25% cross-border import tariffs on most products
- Go to China for robust supply network and top engineering talent
02. Diversify to reduce risk
- Custom supply chain strategy solutions
- Low volume strategy vs. high volume strategy
- Newly expanding manufacturing ecosystems in alternative markets
03. Partner with a supply chain expert
- We’re ready to guide you to an optimal solution. Let’s realize your product development together
Mitigation Strategies
How To Diversify Your China-Dependency
1.
Dependency
All of your sourcing manufacturing and assembly is completed within China. You are paying approximately 25% import tariffs.
2.
High Value Manufacturing
Molds and speciality tooling sent to suppliers in an alternative country for core manufacturing. High volume and low cost parts continue to be supplied from China.
3.
New Market
All manufacturing is completed by Chinese manufacturing companies and the finished components are sent to an alternative country for final assembly. Possible to avoid Section 301 import tariffs.
4.
Transition
All manufacturing and final assembly is fully transitioned to alternative market. Some sub compenents or material may still be sourced from China by your suppliers.
Product Launch Strategies
Trends and Predictions
1.
Sustainable Products
- Amazon “Climate Pledge Friendly” certification
- 18 independent certfication options
- Increased consumer demand, increased competitiveness
2.
US – China Tarrifs
- Slow change expected over coming years
- Do not delay implementing a smart supply chain strategy
3.
Pandemic Impact
- Surging Ecommerce growth
- Incresead opportunity
- Incresead competition
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