The companies of the western countries, who are doing business with Electronic products, for deciding to manufacture them in China cannot be a very easy one. However, there is a scope for a significant amount of cost savings, as China can manufacture the same item at a fraction of the cost that any manufacturers of western countries can.
However, while considering China, one of the biggest concerns is the quality. It is very difficult to assume that Chinese manufacturers can manufacture any electronic goods of the same quality that can be produced in western countries.
There is a perception among consumers that the moment they notice the tag “Made in China” they assume that as inferior quality of the product. The situation has however changed a lot, as Chinese manufacturers also have realized this issue and have taken plenty of measures to ensure to improve the quality of electronic products made in China.
Now, the electronic goods that you can see in the market are of reasonably better quality than before. Often they are comparable with the products that are made in the USA and Europe too.
There can be many reasons that resulted in improvement in the quality of their products. One reason could be the sufficient exposure and experience about the global market and also the growing demand for such goods among the middle-class people in China itself.
China has a huge domestic market for electronics goods, and they are ready to pay even higher prices if they can get a reasonably better quality of products. A few electronic products made in China e.g. toys, mobile phones, and other consumer products are in high demand in China itself.
Today, some of the Chinese brands have become famous globally too. If you ever spend some time in China, then you can see how much the industrial revolution has taken place in China and how that has raised the living standards of the people in China over the last 20 years.
Now let us discuss in this article about various benefits and challenges of manufacturing any electronic products in China
What are the benefits?
The following are the few advantages of going for Chinese manufacturer for electronic products:
- Lower production cost
One of the major reasons for preferring to choose electronic products made in China is the cost-saving. That is possible because China has highest number of skilled labour sources and they are available at a very low cost.
If you work with any manufacturing facilities available in China, it means
you can always reduce your production cost, without compromising on the volume output.
This is one of the biggest reasons why US companies and entrepreneurs have to live with the disadvantages of producing their electronic items at a very high cost in their home country.
- Higher output in lesser time
Quite a few of the domestic factories present in the US have a limitation in their manufacturing capacity and time. However, so far as Chinese manufacturers are concerned this is never an issue at all. They have rather created a huge capacity to produce all types of items.
We have already talked about the availability of cheap labour sources in China that also play a very critical role in producing much higher output at a much lesser time.
Certainly, there are a few ethical considerations so far as the low labour cost is concerned in China, but all facilities are not exploitative.
- Easy opportunities for market expansion
If you manufacture your electronic items in China then you have a ready-made huge market opportunity for your electronic products made in China in China itself.
Most companies who outsource their production in China can sell their products even more than what they could do by manufacturing in their own country. Even the Chinese partner will also help in the local marketing effort.
They also hire their local employees to support this venture. There will be no need to make any extra expense for shipping the goods from the US as the factories are already located in China.
Having more than 1.3 billion potential consumers readily available with you, then what more will you want. This can be a very big advantage if you want to sell your product also.
What are the challenges?
Manufacturing electronic products in China also has many challenges too. Depending on what kind of products that you plan to make, your planning of outsourcing in China may not be quite a viable option too. Therefore, you must weigh all the benefits listed above against the following few disadvantages too.
- Finding a right manufacturer
If you are not familiar with the Chinese business environment, it will be very difficult to locate any suitable company who can manufacture your electronic items. You need to spend a considerable duration in China, visit many trade fares, and have plenty of discussions and meetings that may cost you a lot.
- Language difficulty
One of the biggest challenges is the language barrier. There are only very few people in any Chinese company who can speak or understand English. Unless you have any trustworthy Chinese interpreter with you the discussions can be very confusing.
Shipping your electronic products from China to your country can be another big challenge to encounter. There can be a lot of delays in receiving your electronic products made in China
- Quality of work
You must be having enough experience of any made-in-China products and how fragile they can be. Despite some improvements that have come over the years, your initial supply may offer you plenty of surprises as far as their quality of work is concerned.
- High minimum order quantities
As most Chinese companies typically work for lower profit margins, hence they need very high minimum orders. In case, you are looking for any small-batch manufacturing then you will have trouble finding any company in China.
- Intellectual property risks
Another concern associated is the risk of intellectual property violation. Although the Chinese government has also recognized this concern. However, you have to take proactive actions so that you may not end up with court proceedings on this issue.
We hope this article has given you enough food for thought if you are considering outsourcing your electronic product manufacturing in China.