As a provider of sourcing services to U.S. companies with manufacturing projects in China, we undoubtedly hear of the negative stereotypes about lost jobs domestically. However, those companies savvy enough to recognize there is a huge market in China for their products, realize just how global our economy is. Note the following from a McKinsey report:
Article at a glance:
The value of China’s emerging middle class
As global companies have entered China, many of them focused mainly on serving its urban-affluent consumers. However, if these companies continue to use this strategy they risk missing the real opportunity—the emerging middle class.
During the next 20 years we expect a huge middle class, with enormous spending power, to emerge in China’s cities, following two distinctive waves of growth.
As incomes increase, the spending patterns of this consumer group will evolve, fueling various levels of growth across consumption categories.
Although it will be difficult, companies should broaden their focus to include this swiftly evolving middle class. Since this segment is a hard one to serve, companies must think creatively to succeed.
BaySource works with companies on manufacturing outsourcing projects for components of their finished goods, many of which could be headed right back to China markets. It is more the low value add/high labor projects that are ideal for tapping into China’s huge labor market. As well, we specialize in assisting U.S. companies with high value add projects that consist of high labor content in the final cost of goods.