Why do startups and big businesses alike opt to manufacture in China? And what makes China such a desirable hotspot for manufacturing technological products in particular?
Chinese factories are among the most efficient and talented in the world. They normally produce in greater numbers than factories in other countries and tend to operate at lower profit margins. As a result, the cost to manufacture in China is often notably cheaper than in other countries. Allowing startups and other businesses to thrive and have greater room for higher profit margins, Apple being an exemplar of this.
As you can know, lower costs is a major motivator for businesses and even more vital for startups due to lack of financial cushioning that an established business might have. Furthermore, even after considering taxes and shipping fees, China is still a financially sensible option for startups.
Cost is not the only reason startups choose to manufacture in China. Access to the talent China offers such as experienced engineers, specialist factories and trading connections are all invaluable to a new business. These talents and connections, to name just a few, are all available from a single city and in some cases from a single company. This helps startups to have access to as many opportunities as possible and above all to as much experience as necessary to develop their innovative and not existing gadgets.
China is a rapidly evolving and growing economy and as previously mentioned, they have built a reputation for being a manufacturing hotspot. This is a crucial asset for startups in particular, because it makes it easier to access aligning businesses that work in harmony with startups. For example, a smartphone manufacturer startup could work very closely with app development studios. Each business supporting each other by bringing in customers to the other business.
In addition to aligning businesses, you have competing businesses. Competitors can motivate startups to innovate in order to remain relevant. In turn helping drive forward technological progress. Furthermore startups in China have access to suppliers, factories and other resources that help them to function and grow. Because of these factors, more and more businesses are choosing China as their manufacturing home. Further amplifying the benefits mentioned above.
All of this creates a major ecosystem, that allows any startup looking for factories or suppliers to quickly find several alternatives. Furthermore, it creates a market where nothing is ever missing. For any components, plastics or any other materials your products are made of, China has it all and China has it better.
We work closely with our clients to find the best factories and the best methods to produce your product in China, giving you full control of choice and most importantly to set you on the right track for the future. After our work is done, you will have all the means to manufacture your product without our help. We are here to find the way together because that’s what we love, helping you to build your product.