February 18, 2022

Reassessing Production in Asia February 18, 2022 ‘In the past, selecting a manufacturing location was simple for most companies. Essentially, the key was to get the lowest landed cost. With the pandemic and geopolitics, now there are three dynamics: the lowest cost is still important, but now it is accompanied by supply chain resilience and sustainability.’ ‘Vietnam has been successful for us because early on the government understood the industry. They built the infrastructure and helped to attract some of the supporting industry that we need. In contrast, Indonesia targeted employment for unskilled workers, but didn’t think about anything else.’ ‘China will remain a major manufacturing hub for at least the next three to five years. There’s just no substitute. Because of the trade war and COVID, some companies took some supply chain out of China. China doubled down. The provincial governments in China offer generous incentives to keep you there. When they double down, the economics of it changes; it makes it hard to pull out.’ “India has the ingredients for a fantastic export business. They try to dangle the carrot, “If you make it here, you can sell it in the domestic markets.” But the domestic markets are incredibly complicated. The market is small for premium products in our industry and there are many challenging barriers.’ ‘We’re redesigning our products to have fewer features and to simplify things. Over time, we see that consumers will buy outcomes on a subscription basis, rather than a one-time purchase of hardware. We’re able to customize the outcome better for customers when they have an ongoing subscription. ‘It’s a greener way to sell as well. There’s no trucking in between, no distributor, and you don’t need to pick it up. So, you cut out many loops.’ US-China trade disputes and the pandemic have prompted companies to reassess their manufacturing, and while cost remains a critical factor, the resilience of supply chains and adherence to local ESG regulations are increasingly key. The shift reflects a broader, more balanced approach to evaluating manufacturing locales, underscoring the need for agility and sustainability in the current business landscape. Deepen your understanding & explore the implications for business and strategy in our latest Asia Brief. Log In to access our latest reports. LOG IN Not yet a member?Contact us to learn more. You might also find these insights valuable Asean Asia Pacific China Exchange Rates Forecast Geopolitics Japan Leadership Market Strategy Team-Building China’s AI Evolution: Strategic Insights for Executives May 21, 2025/No Comments China’s AI Evolution: Strategic Insights for Executives May 21, 2025 ‘The requirements imposed on China’s AI products matter. They will… Read More Executive Insights on China’s Sales Outlook May 21, 2025/No Comments Executive Insights on China’s Sales Outlook May 21, 2025 Our quarterly China Survey compiles insights from our members to provide… Read More Indonesia’s Promise: CEOs are confident but cautious May 21, 2025/No Comments Indonesia’s Promise: CEOs are confident but cautious May 21, 2025 ‘So long as they maintain political stability and reasonably good… Read More Load More End of Content.