India favourite to reap rewards of move away from China

A recent survey has revealed that buyers of China products expect India to benefit most from the shift in sourcing strategy away from China.

The 385 buyers who responded to the Global Sources survey revealed that 57 per cent of buyers of China products expect to increase sourcing in other countries and are planning to boost imports from India.

The change is the result of increased export prices in China, which has been driven by escalating costs and a stronger Yuan. More than two-thirds of buyers said the Yuan’s appreciation had swayed their sourcing decisions.

Other favoured sourcing alternatives include Vietnam, Thailand and Malaysia. In particular, Vietnam, which continues to emerge as a viable alternative to China, with 31 per cent of buyers planning to increase procurement in the country.

Export prices of some products in China are much higher than in India because of inexpensive operating costs said Chris Devonshire-Ellis, founding partner of consultancy Dezan Shira & Associates.

He compared the basic expenses of a factory in Dongguan, Guangdong province, with those of a similar plant in Chennai, southeast India. He found spending on salaries, benefits and rent in Dongguan to be seven times higher.

The survey, conducted last month, was mainly of EU and US buyers and covered industries including electronics, home products, clothing and hardware.

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