Asia Business Blog Articles

With the eCommerce businesses reaching new heights of growth, the need for sourcing products online has also become very crucial. It is a fact that Asian markets have contributed to this growth significantly.

Although the Asian markets are very promising with their huge potential it is not very easy to penetrate the market and make profits.  With the difference in the legal systems, customer preferences, cultural ideology, language, and business outlooks, you will need extra due diligence and your complete wits to source products from the Asian market.

But if you are not aware of these challenges, then read on to find what all you should be doing before sourcing products online especially from the Asian market.

1. Identifying the best manufacturers

The major challenge faced by the companies is to identify the manufacturer of their products in the Asian markets especially China. Most of the trading companies sell the products and pretend to be real manufacturers when it is not the case.

Also, you may be dealing with a shell company altogether and get duped, if you don’t identify your manufacturer well.

You have to identify that you are directly dealing with the manufacturer and not with a trading company. The major advantage of dealing with the main manufacturer is lower cost and higher profit margin for you. Also, the quality of the products can be controlled directly.

2. Quality Assurance and Control

Unlike the west, it is very difficult to get consistent quality assurance and control over the products sourced. In Asian countries, there can be changes in the manufacturing process without the approval of the client and no QC reports are shared with the customers.

There is a lack of feedback system and the implementation of corrective action is very rare. This is a major challenge faced by US companies since quality is their highest priority.

3. Lack of Transparency

Another major challenge with the Chinese manufacturers is the lack of transparency. The pricing game is played and the main supplier does not reveal the actual cost to the client. Further, the sources of component / raw-material suppliers are frequently changed and not communicated to the client. Further, the formal qualification of component manufacturers is not insisted upon which leads to higher risk and even deterioration of quality of the products.

4. Complex Documentation Requirements

Most of the Asian countries especially China and India have very complicated legal and documentation requirements. You also have to undertake the currency exchange rate risk and also undergo the local import-export restrictions.

There is a high chance of leaking of your designs and blueprints because most of the Asian manufacturers’ employees don’t sign the confidentiality contract. Many companies allow the employees to use their personal email address which makes it more unstable and prone to hacks.

Because of poor IT security, the personal mails may get hacked and you will lose your confidential blueprints and designs.

Conclusion

These are some of the challenges faced by companies when sourcing products online from the Asian markets. But apart from the challenges, there are benefits like low labor, low cost of manufacturing, and very high-profit margins. If the currency exchange rate works in your favor, then the profit margins will be even higher. Solve all the challenges and make your business profitable today!

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