Asia has long been at the centre of global supply chains, driving the manufacturing backbone of countless industries worldwide. Countries such as China, Vietnam, India, and Cambodia offer a refreshing mix of benefits, from low production costs and deep manufacturing know-how to easier routes into crucial markets.
China, for years, has led the way thanks to its vast industrial setup and world-class infrastructure. Recently, though, increases in Chinese wages are encouraging businesses to look at up-and-coming players in Southeast Asia. Vietnam and Cambodia are proving popular for labour-intensive manufacturing, as their wage levels remain highly competitive. India, meanwhile, combines low labour expenses with a surge in electronics and textiles capacity that’s catching the eye of international firms.
For businesses focused on efficiency and adaptability, working with SourceOne for Asia sourcing has become more important than ever. These experts can help you make sense of the local landscape—social, economic, and logistical—which is often anything but straightforward. By working with these specialists, companies gain stronger risk management through diversified suppliers and can play to each country’s strengths for various products. This approach builds supply chains that are not only more resilient, but also primed to stay agile when markets shift.
Understanding the Asian Sourcing Landscape
Asia’s sourcing scene is anything but uniform. Each country brings its own strengths—and quirks—to the table, which can make all the difference when deciding where to produce your goods. China, which used to be the go-to for cheap manufacturing, still has a powerful industrial backbone and leads in high-tech production. But wages have been rising fast. By 2024, factory workers in Shanghai earn at least RMB 2,690 (about US$370) per month. Back in 2020, China’s average manufacturing pay was already around US$6.5 per hour. This jump in labour costs means many brands are rethinking where they put their money, especially for jobs that are heavy on manual work.
That’s where Vietnam and Cambodia come in. Vietnam offers an average wage of roughly US$3 per hour, making it a hit with footwear and apparel companies that need a huge workforce—think more than 700,000 people in the garment sector alone. Cambodia is a favourite for businesses determined to keep production costs to an absolute minimum. Meanwhile, India stands out for its vast labour supply, with daily wages as low as INR 178 (about US$2.10), making it a serious contender for textiles and electronics.
Yet, choosing where to source isn’t just about chasing the lowest pay. How efficient workers are matters just as much. China’s higher productivity sometimes makes up for the bigger wage bill, especially in complex manufacturing. Vietnam and India are getting better in this space, with Vietnam’s productivity growing by about 3.6% each year—helped by a young and well-educated workforce. Even so, both countries still lag behind China for overall output.
Access to markets is another big factor. Vietnam, for example, enjoys the perks of multiple free trade agreements, cutting tariffs and boosting its competitiveness. Governments across the region regularly adjust rules, provide incentives, and support industry growth—all affecting where businesses decide to base their sourcing. The smartest approach? Mixing and matching these factors to strike the right balance between cost, efficiency, and access to key markets.
Key Strategies for Effective Collaboration
Cost Optimisation
Sourcing from Asia offers a major advantage—lower production costs than you’ll typically find in Western countries. This is mostly thanks to reduced labour rates and large-scale production. Take Vietnam and India, for example. Both countries provide noticeably cheaper conditions for manufacturers. In Vietnam, average hourly pay sits at around US$3, while in India, some daily wages come in at just INR 178, which is about US$2.10. These savings can add up quickly across materials, production, and buying costs, giving your bottom line a real boost.
That said, chasing the cheapest price isn’t the whole story. Finding the sweet spot means looking at productivity and quality, not just the wage bill. China still attracts plenty of business because, while wages have climbed, factories manage fantastic output with their skilled staff and smart logistics. Vietnam is catching up too, with annual productivity growth around 3.6%, fuelled by a young workforce.
Keeping an eye on quality is just as important as watching costs. High defect rates can turn cheap sourcing into an expensive headache. If you want fewer returns and reworks, clear communication and building trust with suppliers makes all the difference—regular checks and transparency go far in maintaining standards.
Striking the right balance is about weighing up costs, efficiency, and product quality. If you can make the most of Asia’s cost advantages without letting quality slip, you’re well on your way to a streamlined, cost-effective sourcing plan.
Utilising Local Expertise
Working with local sourcing specialists goes a long way in helping businesses break into Asian markets with confidence. These specialists have an inside track on how different countries in Asia really work, from government rules and regulations to daily business practices.
Having someone with this knowledge means you benefit from up-to-date information on economic conditions and trends, which helps you stay ahead when things change quickly. Partners like these can help you avoid surprises and keep your supply chain steady.
There’s also the matter of building relationships. Local experts know how business is done, whether you need a firm handshake in India or prefer more formal approaches in China. Every country has its quirks, and misunderstanding them can slow down even the best deal.
A good local partner acts as a bridge, sorting out possible miscommunications and smoothing over cultural differences. This keeps everything ticking along, preventing unnecessary setbacks or confusion. Tapping into their expertise is about much more than efficiency; it’s the foundation for strategies that really connect with local expectations and set up long-term success across Asia.
Risk Management and Diversification
Relying on just one country for your supply chain needs can quickly trip up even the best-laid business plans. Whether it’s a pandemic, new tariffs, or sudden political changes, recent years have shown just how exposed a single-source strategy can be. Spreading production across several countries is now the go-to way to limit the fallout from unexpected shocks.
An increasingly popular approach is known as ‘China+1’. This means keeping a substantial presence in China, in part because of its skilled workforce and strong manufacturing capabilities, but also expanding into places like Vietnam, India, or Cambodia. Many global brands—Apple and Samsung among them—have set up new production hubs this way. Apple, for example, is moving to make a quarter of its iPhones in India by 2025, and Vietnam is taking on more of its product lines. This split setup lets companies use China’s expertise for complex products, while simpler or labour-heavy work is moved to lower-cost regions.
By picking locations based on what each country does best, businesses boost their flexibility and protect themselves against disruption. The ‘China+1’ strategy helps balance out risks, takes advantage of local strengths, and keeps supply chains running even if something goes wrong in one country. It’s a practical way to build safeguard after safeguard into your operation—because in supply chain management, a bit of back-up never hurts.
Quality Assurance in Asian Sourcing
Making sure products measure up across Asia takes commitment on the quality front. Different countries often have their own approaches to production and quality standards, so companies need a single set of requirements every supplier must follow, no matter where they are. Laying out these ground rules, and checking in on them regularly, is the only way to keep standards high. Scheduled audits and inspections should be normal practice, so there are no surprises down the line.
Working with reputable third-party quality inspectors brings in independent feedback and greater peace of mind. This makes it easier to catch potential problems before your goods are shipped—and helps keep everything running smoothly.
It’s also crucial for businesses to have straightforward communication with their suppliers. Spelling out expectations and agreeing on detailed specifications cuts out confusion and prevents errors. Some companies even invest in training for their suppliers, getting everyone up to speed on what constitutes acceptable quality.
Technology plays a helpful part as well. Quality management systems can monitor compliance and provide a record of any issues, helping teams act quickly when problems arise. By putting these steps at the heart of their sourcing strategy, companies can keep quality consistent, wherever their supplier is based. This kind of attention reassures customers and reinforces your brand’s reputation over the long haul.
Maximising Advantages of Asian Infrastructure and Policies
China and Vietnam stand out with impressive infrastructure, which is one of their key strengths as sourcing locations. China’s ports like Shanghai and Shenzhen are among the busiest in the world, supported by extensive freight railways and reliable road links. If you’re under pressure to move goods fast, China usually delivers—the turnaround from packing to shipping can be almost immediate, which is music to the ears of any company needing to stay nimble.
Vietnam, though a step or two behind China, is making striking progress. The country has poured resources into major port upgrades, naming Cai Mep and Hai Phong as two hubs to watch. Still, not every part of Vietnam is up to speed yet. Internal roads and railways vary, and businesses remember the 2023 blackouts all too well, which proved the value of fallback plans like backup generators for factories.
Policies also shape the sourcing equation, especially when tariffs and free trade deals get involved. China, despite its strong supplier network, deals with higher tariffs from places like the US and EU—something that can tip the scales for buyers weighing up costs. By contrast, Vietnam shines when it comes to trade agreements. Its many free trade pacts, including the CPTPP, let Vietnamese exports into markets like the EU with reduced or zero tariffs, offering a real financial edge and helping to balance out any slower delivery times caused by infrastructure still catching up.
So, when making sourcing decisions, it pays to look beyond factory gates. Taking stock of both physical infrastructure and the impact of trade policy gives companies more control over their supply chain, whether they need to cut costs, move goods quickly, or soften the blow of sudden political shocks.
Future Prospects and Strategic Growth
Spotting new chances in Asia is key if you want your business to keep growing over time. This region is shifting quickly, with fresh pathways for expansion opening up all the time. Take Vietnam, for example. It’s now on many companies’ watchlists thanks to affordable labour, a growing industrial sector, and positive trade deals—especially the CPTPP. By setting up in Vietnam, businesses can access other markets more easily, keep tariff costs down, and give themselves a fighting chance in the global marketplace.
It’s wise for companies to spread their sourcing across several Asian countries rather than depending on just one. This approach lowers the risks from sudden supply shocks or political squabbles and lets firms make the most of each country’s unique benefits. While Vietnam and Cambodia are known for low-cost manufacturing, India stands out with its enormous workforce and growing sectors like electronics and textiles.
The good news continues, too. Many Asian countries are upgrading their ports, roads, and logistics—Vietnam being a clear example with big investments in its transport network. Staying tuned into the fine print of local labour laws and trade policies also helps firms set up strategies that can cope with future changes. With a mindset focused on flexibility and smart market research, businesses can spot growth opportunities, avoid nasty surprises, and keep their edge in Asia’s busy market.
