Companies to source from India and Vietnam as China prices rise
RMB’s appreciation has affected China sourcing
Over 50% of consumer products buyers intend to increase sourcing from India and Vietnam because China’s exporters are becoming less competitive within the value products market, according to Global Sources. In a survey of 385 buyers from the US, EU and Middle East, 68% said the RMB’s appreciation has affected their China sourcing strategy, with 54% citing higher export prices as a result.
In response, 54% of those asked said they intend to boost imports from other countries. Of these, 57% pointed to India as their favoured alternative. Meanwhile 31% of buyers surveyed said they would increase procurement from Vietnam.
“Given the changing price point of China products, China’s exporters must work harder to market themselves and justify their higher prices in terms of service, product quality or production volume,” comments Craig Pepples, Global Source’s president of corporate affairs.
Other measures buyers intend to implement, according to Global Source, include raising retail prices, purchasing only low-end items from China, pegging export prices at a fixed exchange rate and using RMB in trade settlements.
The survey, which included buyers of various China products including electronics, home products, gifts and premiums, garments and textiles, and hardware, was conducted in December 2010.
The complete survey may be downloaded at www.globalsources.com.