Ford announced its plan to buy about $1 billion in auto parts from Chinese suppliers. Wal-Mart has set up a purchasing department in Shenzhen in order to buy products directly from Chinese manufacturers. Philips Electronics has a total output value of more than $5 billion in 23 factories in China, most of which are used for export. The reason these companies and many others use China as their purchasing base is to save the cost of spare parts and finished products – but the significance of China’s purchasing action will go far beyond that. The ultimate goal is to gain the cost advantage of the enterprise.
Of course, business activities in China, like those in other developing country markets, have considerable risks and challenges. But our experience shows that enterprises can completely control and overcome these risks and challenges. In fact, the biggest risk is that action is too slow. China has had an important global influence in many industries long times ago. As a result, companies that have not yet taken action – or lagged behind their competitors – will be at a competitive disadvantage.
Five Levels of Procurement Advantage
With the diversification of cost savings in China, alternative strategies have increased accordingly. According to our experience, the advantages of purchasing in China can be clearly divided into five levels.
Level 1: Exploring “Water Temperature”
Level 2: Purchasing Parts or Finished Products
Level 3: Developing omni-directional procurement
Level 4: Implementing the Integrated China Strategy
Level 5: Achieving Global Advantage
Our products are the china sourcing products. Chinese goods have better quality at the same price and lower price at the same quality. As the agent of china sourcing products, we will not make huge profits from the products. From the perspective of consumers, we will introduce the best side of the china sourcing products to buyers.
