Saturday, April 17, 2010

Sourcing from China! by Mr. K. Swaminathan

The dragon nation has always been a mystery. Its stupendous growth in the last three decades has been an envy for both the developed and developing countries across the world.  The success story and the business environment of Asian countries like Japan, South Korea and Middle East nations has been widely discussed and analyzed in a many forums and business magazines. But, we are less exposed to the business environment in China.

So, “Corporate Wisdom” team arranged for an enlightening session on “Sourcing from China”. The speaker for the event was Mr. K. Swaminathan, Head – SCM, L&T – AUDCO India Limited. Mr. Swaminathan has spearheaded the initiative of Strategic Sourcing from China. He gave us a brief talk about L&T – AUDCO’s experience in China.

The lecture started with the introduction to the 5V’s of Sourcing. Then, the reasons for the success of China in manufacturing were widely discussed. China has advantage over India due to cheaper raw material, cheaper electricity, high labour productivity, efficient power transmission, lower cost of capital and better infrastructure.  The comparative study in the above factors, between India and China, clearly the described the advantages China has in manufacturing.

Then, we were briefed about the business environment in China.  The Chinese people are basically non-versatile in nature. So, to have a business relationship with China, we need tough peoples to convince them and also it’s more important for them to adapt with Chinese Culture. Only the “Quanxi” i.e. good relationship we maintain with Chinese businessmen will help during the tougher times, they will never yield to any other tactics.

The other difficulties in Sourcing from China are language, product quality and learning capabilities if Chinese. Only few Chinese people know English. So, for any long term business relationship in China, knowledge of Mandarin language is must.  China is notorious for its poor quality, so quality inspection before shipment is a must. Chinese, unlike Indians, can’t understand complex issues. So, it’s necessary to brief them repeatedly about our requirement, until they understand it.

The manufacturing techniques of Chinese firms are quite unique. Their techniques are simpler and cost effective, which also adds to their existing extraneous advantages.

At the end of the day, the dragon nation's business environment and practices were demystified to a great extent.

Contributed by
Balachandru G,
DoMS IIT Madras, MBA 2011 Batch.


  1. Hey there, thats a nice article, but it doesnt seem to explain any of the over-viewed subjects.

    I've taken an interest in sourcing from china a while back and I was hoping to consult or find information of the matter.

    I've found a company that specializes in sourcing from china and I wanted to get more info from other sources about other good companies, or maybe an opinion/review about the one I found?

  2. As we all know that China is playing a more and more important role in international trading. Many companies and people from different countries want to do business in China, but they don’t know how to start:

    Very interested in high quality/ low price products made in China, but you have no idea how to find it ?

    Found the product from internet, but don’t know whether the supplier is a factory or a trading company ?

    Placed the order, but not sure whether the factory can deliver the goods in time and worry whether the quality is exactly the same with samples?

    Want to set up an office in China, but the registration is complicated and the operation cost is high ?

    If you are suffering above problems, please let me help you. It is always better to have a Chinese assistant when conducting business.

    What can i do for you?
    1) Interpreter & translator in language English / Chinese.

    2) Transportation arrangement: such as hotels and air tickets booking, guide for personal shopping and guide for tour.

    3) Guide for business to the wholesale markets and manufactories. Business assistant in Canton fair and other exhibitions.

    4) Orders following up, goods inspection, shipment arrangements, handling export procedure, make and post shipment documents to buyers

    5) Source new products and suppliers.

    Please contact: Ms.Bonnie

  3. Thanks for Sharing informative blog with us. Tiger Global makes sourcing from China a simple proposition for our clients. We source goods from a wide variety of reliable suppliers and manage the whole supply chain right through to your destination anywhere in the world.


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