Consumer products is a huge market in any country because of the consistent demand for such goods. Some of the examples for consumer goods are electronics, toys, home décor goods, kitchen appliances, handbags, cosmetics, sunglasses, lights, mobile phone accessories, pet products, and many more. These are the kind of products that most people use in their everyday lives.
You can make good profits by starting a business that sell consumer products, but you will rule your domestic market if you import your merchandise from China in the right way. It is not a secret anymore, most of the wholesalers and big brands are getting their products made in China. It works out to be cheaper even after calculating the shipping costs and import taxes.
Unlike in the past, buyers from across the world are not so apprehensive about buying Chinese goods. Even the top multinational companies have their factories in China. Over the past two decades, Chinese manufacturing sector has worked hard to shed off the bad reputation of the past, and have done so successfully. They give more importance to quality checks during the manufacturing process. Now the world trusts China to deliver quality goods at lower costs when compared to most of the other countries.
The prospect of developing your e-commerce business by sourcing products from China has never been easier or more lucrative. In this post, we have listed out the principles and useful strategies for procuring consumer products from China.
Identifying the right products
First you need to identify the market trends or determine what the market is ‘into’. This data helps you to know about the sales numbers, customer responses, and market forecast for the past, current, and coming years. Market trends are an excellent indicator to know about the demand for the product categories you are interested in. You can use Google to search market trends from for credible sources.
For example, let us look at the global market trends for electric toothbrushes.
Sales value in 2021 is USD 3,657 million.
Sales value in 2022 is USD 3,990 million.
By 2030, it is projected to grow to USD 7,519 million.
From this data, you can see 8.24% growth per year. It does sound like a lucrative opportunity to sell electric toothbrushes in your ecommerce business, but you must also consider other factors like competitive insights, key market players or brands, industry developments, market segmentation, regional outlook, and end user categories before making your decision. It will help to make a proper feasibility study while choosing the products to sell in your ecommerce business.
Data Source – https://www.marketresearchfuture.com/reports/electric-toothbrush-market-7983
One of the most useful tools for measuring the interest in specific products, at particular period of time, is Google Trends. You can use it to find the data of the search terms that are used by people on the topics of your interest. This tool gives real time data on searches.
Other sources of such information are social networks - Hashtags or posts of popular bloggers, influencers, and brands may indicate which goods are in demand at the moment. You could also join import/export or groups on social media and ask questions. These groups will have thousands of members. Not only will it help in getting valuable information, it also gives you an excellent opportunity to make new contacts.
The next step is to try and identify the product categories for targeting your search. Some of the top categories are fashion accessories, beauty products, home décor accessories, mobile accessories, electronics, home appliances, toys, outdoor products, food products, etc.
While conducting a market analysis, it is recommended to use a blend of tools and approaches. For example, you can use data from Google Trends and try to find the competitors on social media sites. You will also get to know what their customers have to say about products. You will also need to focus on your competitors’ marketing activities, check industry reports, and conduct surveys or focus groups, to gather additional information.
It is important to identify consumer products that are vital to boost your e-commerce business to increase your chances to stay on top in this already competitive e-commerce market.
Navigating China’s sourcing ecosystem
The complex nature of sourcing in general makes it crucial to get to know the most important wholesale markets as well as trade shows. Canton Fair and Yiwu Market have well earned their reputation as having almost every kind of product imaginable and very active market. When choosing between manufacturers and trading companies, you need to consider their pros and cons. When sourcing directly from the manufacturers, the advantages are lower prices, customization options, and easy to foster long-term relationship with manufacturers
However, this process takes more time and efforts in communication and quality control. While trading companies provide convenience and are experienced to get over the logistically and language hurdles. However, they will cost more and are not as flexible.
Market places like Alibaba and its Chinese counterpart 1688 has changed the ways global businesses source products from China. These web-based platforms provide comprehensive supplier lists, cost information, ways to order and monitor deliveries online. Alibaba is ideal for international customers and 1688 is more convenient for domestic purchases because here prices are much lower and range of products is much bigger. Through these the tools you are able to source effectively and indeed access a larger network of supply and products.
Building a winning strategy for quality and cost control
The main objective in this strategy is to assure cost and quality control in the procurement process. In dealing with Chinese suppliers, negotiation success depends on the knowledge on market factors, practices, and culture. Ideally, a good negotiation strategic plan should cover research aspect, professionalism and relationship management.
In striving to implement the discussed strategy one of the most significant activities is to engage in good bargaining with Chinese suppliers. Ideally one must be sufficiently prepared and have adequate knowledge about a particular product or service they are negotiating for, the market prices and be flexible to compromise as well as meet certain objectives.
It is valuable to get to know the Chinese culture around negotiation and learn local practices to foster trust. Normally, the best terms are negotiated when both the parties respect one another and are willing to partner for long-term.
Remember, Chinese suppliers have nuances such as MOQs and tiered prices. Some suppliers offer prices depending on the quantity and the appropriate MOQ, where you get the chance to negotiate for better prices. Other factors to consider are whether the suppliers’price their products for retails in tiered order and which break points can give you a cheap price. To avoid a high cost, you can negotiate with the supplier and clarify the quantity and price.
In this strategy, quality inspections and sampling play a significant role. Quality control is important in order to maximize the possibility of getting products in your preferred standard. For the effective functioning of the quality control system, its work should include regular quality checks and sampling at different production stages.
It also helps you detect deviations or defects in the products during production cycle and address it before they worsen. This ensures you get consistent high quality consumer goods from China.
Ensuring smooth shipping & logistics
In China, there are three primary forms of transportation including air freight, sea freight, and express shipment. The type you choose will depend on aspects such as cost, time and the products nature. The popular options are air freight and sea freight.
The next step is to get acquainted with Incoterms to know your and the supplier’s legal position or standing. For instance, FOB (Free on Board) makes the seller responsible for the shipment up to the point when it is loaded on the vessel while EXW (Ex Works) makes the buyer accountable for the shipment from the factory.
To avoid extra shipping expenses, modify the documents of your cargo, talk your freight forwarder about future difficulties, combine your shipments in case it is possible, and use additional services. It is a common business belief that proper planning and coordination are important in determining the efficiency of the shipping process.
Branding & selling Chinese consumer goods effectively
Private labelling or customizations add value. It includes making changes to your products in a way that meets the consumer requirements of each segment. Entrepreneurs can collaborate with manufacturers in designing products, customize packaging, and maintain quality control suitable to your target consumers. Remember, tailored offerings are more appealing to target consumers than common products and they feel more involved in your brand.
You must eliminate the misconception about “Made in China” and concentre on the trust-building process. Ensure appropriate information about your product is made available to the public. With reference to the quality control measures, certifications and the production process your company can show that they are committed to providing quality products.
In your marketing campaign, highlight the unique product qualities like the use of energy friendly technologies or environment friendly raw materials. It helps your products stand out in the market. Marketing on the social media platforms and e-commerce websites should include high quality pictures and videos as well as post purchase consumer feedback.
Decided methods such as offering lower prices compared to competitors, or offering products in combination with other similar products also increase the variants accessibility and appeal to sensitive price consumers.
Pitfalls to avoid when sourcing from China
Currently, sourcing Chinese consumer products can be quite rewarding since you get to access a broad range of products at convenient prices and quality work. However, there are several pitfalls to be aware of when sourcing from China:
To avoid the frustration of working with unreliable partners, it is important to conduct adequate research and check the partners’ credentials. Factory audits help in finding reliable vendors that suit your precise requirements.
There might also be compatibility issues arising from languages, and this may result to conflicts due to communication breakdown. A steady and direct communication crucial. You could use the services of a bilingual sourcing agent to bridge the communication and cultural gap.
Having one supplier can also be a problem because your business and supply chain will be disrupted if the supplier faces any setback. To reduce this risk, you must consider working with multiple suppliers or at least narrow down a few backups to turn to if needed.
You must give importance to compliance laws and certification when it comes to cross border shipment of products. Lapses in paperwork can lead to hefty fines, or delays, or even have your product confiscated at the customs.
Future trend in sourcing gods from China
Over the last few years, there has been a massive outstanding increase in the global production of green manufacturing and green products. There is a trend of consumer making conscious choices concerning products, especially those that affect the environment. To this end, it was found that many Chinese manufacturers have embraced green technologies and practices which include reduction of carbon emission, wastes, power consumption, and use of green power.
It is hoped that this trend will also be seen in the future, as organizations attempt to cater for the increasing consumer shift towards environmentally friendly Chinese consumer goods.
Another shift seen to be revolutionizing the Chinese sourcing industry is the outsourcing of smart products and smart technologies. The growth of AI and IoT is seeing more and more objects turn smart and connected. Whether it is home appliances for the smart home, or smart wearables, most of such products are being made in China. It is for this reason that as technology advances in specific sectors, it becomes even possible to launch even more smart products in the following years.
Moreover, the fluctuating trade policies are also influential determinants of ecommerce sourcing from China in the future years. In the present global order, there is a distinct change of policy that has been experienced recently - for instance, the trade war between USA and China. Such alterations may result in added benefits or penalties on the feasibility and cost of the importation of vast Chinese commodities.
Since trade policies are constantly changing it is of more importance for the commerce houses to stay update, adapt the changing process and establish a strong position in the ecommerce market.
Conclusion
Sourcing consumer products from China needs proper planning for consistent market success. Use the strategies discussed above and grasp the opportunity to scale up your ecommerce undertakings and improve your market competitiveness. It includes identification of new, profitable items, effectiveness, and enhancing customer satisfaction.
You must not let go the chance of taking your ecommerce business to newer heights. Start today and research the Chinese market for opportunities to make good money by selling consumer products from China.
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