Alibaba States China Is Still Top Supplier To Global Buyers

According to a quick poll of top global buyers from Fortune 500 companies by Alibaba.com, China remains the world's top supplier despite rising production costs.

The poll, which included retail giants from the US, Europe and Australia, revealed that although production costs in China have risen as a result of new labor laws and the appreciation of the Yuan, China remains the most popular supplier base in the world, followed by other emerging supplier markets such as India, Thailand, and Vietnam.

David Wei, CEO of Alibaba.com stated that over the years, Chinese suppliers have redefined themselves beyond competitive pricing and sharpened their advantage in terms of quick turnaround, good infrastructure, speed to market and compliance with international standards. He added that while there is a lot of competition from cheaper alternative markets, none of them can beat China's vast choice of products and suppliers.

The survey of large corporate buyers from Europe and the US highlights growing trust in suppliers from China, which is essential for global trade and e-commerce to flourish.

The respondents said that the majority of their suppliers come from China, with 48% saying they have seen no change to their supplier country mix over the last few years and 52% saying they have seen only a limited change.

Most big buyers (67%) said they have experienced an impact on their business from the US economic slowdown; however, 57% of them had no plans to drop their purchase volume from China this year. Those who were planning a drop in purchasing volume specified that this will be a relatively small decrease in the order of 10%.

Although 62% of the big buyers said they are open to shifting their production base away from China, they intend to do this later rather than sooner. Of the respondents who had considered a shift away from China, 68% said they are not totally satisfied with other supplier bases. In their view, the alternative Asian markets face various problems that might affect production, including shortage of raw materials, underdeveloped infrastructure, long production lead times, limited product offerings and quality issues.

Respondents cited trade shows, sourcing offices and online marketplaces as their most preferred sourcing methods. Two-thirds of the respondents identified online sourcing as the trend of the future, mainly because it is a fast, effective and environmentally-friendly way of doing business that saves travel time and expense. Despite the shift online, respondents indicated that traditional means of sourcing such as face-to-face meetings will remain important for supplier assessment and qualification.

The quick poll, which was conducted in June and July, was announced at the 2nd APEC Business Advisory Council SME Summit in Hangzhou, China. It was conducted by Alibaba.com's Big Buyer Service and Development team, which provides professional sourcing services, training and online and offline supplier matching to help companies with large procurement needs recruit high-quality suppliers. The team works with some of the world's largest retail corporations such as Home Depot, P&G, Ikea, GE, Macy's, Sears, Auchan, Otto, Woolworths Australia and Toshiba.

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