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15 China Sourcing Alternatives for a Diverse Supplier Portfolio

Fill in the blank: Made in _____. If you’re like most Americans, your gut response was “China.”

For decades, China has been one of the US’s largest trade partners, always with a significant trade deficit (read: The US imports more than it exports).

However, the tides may be changing. Fill in that blank again in 10 or 20 years, and the average American might have a different response.

After years of political shifts and unexpected events, merchants have started diversifying their product-sourcing portfolios as the risks associated with relying only on China have increased.

Since the early 2020s, it’s become painfully clear that disruption can happen anytime and anywhere. For growing sellers, having multiple sourcing options just makes sense. 

But there are several other benefits to a well-diversified supply chain — including, increased cost savings, product innovation, access to new markets, and a greater socioeconomic impact.

If there were ever a time to think seriously about diversifying your supplier base beyond China, this would be it. And the good news is you now have more options than ever.

Best China Sourcing Alternatives:

  • Sourcing Alternatives in Central and South America
    • Mexico
    • Colombia
    • Brazil
    • Peru

  • Sourcing Alternatives in South Central Asia
    • India
    • Bangladesh
    • Turkey

  • Sourcing Alternatives in Southeast Asia
    • Malaysia
    • Indonesia
    • Thailand
    • Cambodia
    • Philippines
    • Vietnam

  • Sourcing Alternatives in Europe
    • Poland
    • Hungary

  • Questions to Ask Potential Suppliers

  • Building a Sourcing Strategy With the Right Funding Partner

15 China Sourcing Alternatives China — by Region

Finding new suppliers is easier said than done. Which countries could compete with China — a manufacturing hub that’s both cost-efficient and highly skilled?

It’s a wide world out there and many sourcing alternatives have so far been overlooked. While China may still be a viable supplier for many sellers, diversifying your suppliers across the globe is becoming both more necessary and more viable.

Sourcing Alternatives in Central and South America

Mexico

A growing number of e-commerce sellers are adding Central and South American countries to their supplier mix. Countries in Latin America have been rapidly leveling up with progress in every step of the supply chain stage from raw material sourcing to shipping.

If you’re a US-based retailer, linking up with suppliers in Mexico is a practical option.

Here are some of the top reasons to partner with suppliers in Central and South America:

  • Free trade agreements through NAFTA
  • Proximity means lower shipping costs and quicker shipping time
  • Shipping smaller quantities is more practical — no more warehouse hoarding!
  • Similar time zones aid communication

Not based in the US? Mexico may still be a workable option as it has lower labor costs than China, better intellectual property protection, and a highly skilled workforce.

Top exports from Mexico:

  • Automobiles
  • Electronics
  • Medical devices
  • Plastics

Top websites to find reliable partners in Mexico:

Quick look: Evaluating Mexico as a sourcing alternative

Mexico: Sourcing ProsMexico: Sourcing Cons
-Low tariffs
-Quick and affordable shipping
-Low labor costs
-Regional crime and corruption
-Language barriers
-Complex regulations and compliance

Colombia

Colombia also has free trade agreements with the US and Canada, so similar to Mexico, products can be shipped in without a tariff. In 2022, the country shipped $39 billion worth of products around the world.

Top exports from Colombia:

  • Coffee, tea, and spices
  • Gems and precious metals
  • Food products
  • Plastics
  • Machinery including computers

Top websites to find reliable partners in Colombia:

Quick look: Evaluating Colombia as a sourcing alternative

Colombia: Sourcing ProsColombia: Sourcing Cons
-Internal investment in infrastructure
-Relatively politically stable
-Low labor costs
-Easy access to certain raw materials
-Logistical challenges due to mountainous landscape
-Complex regulations and bureaucratic processes

Brazil

Brazil is the largest country by population and land area in South America. The country saw a 39% increase in the dollar value of global exports from 2018 to 2022.

Top exports from Brazil:

  • Oil seeds
  • Food products like meat, cereals, and confections
  • Iron and steel
  • Machinery including computers

Top websites to find reliable partners in Brazil:

Quick look: Evaluating Brazil as a sourcing alternative

Brazil: Sourcing ProsBrazil: Sourcing Cons
-Large market with industry diversity
-Abundant raw materials
-Stagnant or weakening economy
-Complicated tax system and regulations
-Possible customs delays

Peru

In the past two decades, Peru has experienced economic growth and reduced poverty rates. However, political instability has grown in recent years, increasing uncertainty.

Top exports from Peru:

  • Gems and precious metals
  • Fruits and nuts
  • Copper and Zinc
  • Coffee, tea, and spices
  • Textiles

Top websites to find reliable partners in Peru:

Quick look: Evaluating Peru as a sourcing alternative

Peru: Sourcing ProsPeru: Sourcing Cons
-Exports not subject to tariffs
-Improving infrastructure
-Strong contract and property rights protections
-Political instability and social conflict
-Cumbersome government procurement processes

Sourcing Alternatives in Southern Asia

India

The Indian economy isn’t the fastest-growing in the world, but that’s because it’s been a major player for decades. Its trade relationship with the US showed great resilience in the aftermath of the pandemic.

While there’s a lot of opportunity for sellers to source from India, there are also quite a few hoops that foreign investors have to jump through in order to register a business. If you’re looking to set up your own supply source there, you may have your work cut out for you.

Top exports from India:

  • Gems and precious metals
  • Organic chemicals
  • Electrical machinery and computers
  • Pharmaceuticals

Top websites to find reliable partners in India:

Quick look: Evaluating India as a sourcing alternative

India: Sourcing ProsIndia: Sourcing Cons
-Lower chance of language barriers
-Stable, resilient economy
-Excellent tech skills
-Large domestic consumer market
-Complex regional markets
-Complex regulatory and tariff policies
-Infrastructure still lacking

Bangladesh

Compared to many of the other countries on this list, Bangladesh is fairly niche in its exports. It’s all about textiles, and we’re here for it.

Bangladesh is one of the most densely populated countries in the world and has demonstrated infrastructure improvements and consistent GDP growth in the past couple of decades.

Top exports from Bangladesh:

  • Clothing and textiles
  • Footwear, headgear, and accessories
  • Feathers, artificial flowers, and hair
  • Vehicles

Top websites to find reliable partners in Bangladesh:

Quick look: Evaluating Bangladesh as a sourcing alternative

Bangladesh: Sourcing ProsBangladesh: Sourcing Cons
-Low labor costs
-Government incentives for foreign investment
-Expertise in textiles
-Infrastructure challenges
-Sourcing from rural regions presents logistical complexities
-Limited product diversification

Turkey

Turkey’s fast-growing economy and strong trade, political, and military relations with the US make it an attractive sourcing partner. The country saw a 51% increase in the dollar amount of global exports from 2018 to 2021.

Top exports from Turkey:

  • Vehicles
  • Electrical machinery and computers
  • Iron and steel
  • Plastics
  • Clothing and accessories

Top websites to find reliable partners in Turkey:

Quick look: Evaluating Turkey as a sourcing alternative

Turkey: Sourcing ProsTurkey: Sourcing Cons
-Growing economy
-Strategic location at the crossroads of Europe, Asia, and the Middle East
-Strong relationship with the US
-Unstable economy
-Increasing tariffs on certain products
-Political strife

Sourcing Alternatives in Southeast Asia

Malaysia

Malaysia is quickly becoming a sought-after sourcing destination. There are already well-equipped and well-invested Malaysia-US and Malaysia-EU corridors in place, setting it up as a “natural base” for manufacturing partnerships.

Unfortunately, Malaysia has recently been under fire for illegal employment and factory worker abuse, which may create roadblocks, delays, and potential shutdowns if the situation escalates.

Top exports from Malaysia:

  • Electrical machinery and computers
  • Animal and vegetable fats, oils, and waxes
  • Medical devices
  • Plastics
  • Rubber items

Top websites to find reliable partners in Malaysia:

Quick look: Evaluating Malaysia as a sourcing alternative

Malaysia: Sourcing ProsMalaysia: Sourcing Cons
-Good political and economic relations with the US and the EU
-Established, high-quality supply networks
-English-speaking environment
-High market growth potential
-Limited labor pool
-Slower economic growth post-pandemic
-Illegal employment in certain factories can increase chances of delays and shutdowns

Indonesia

As a part of the Making Indonesia 4.0 initiative, the Indonesian government is focused on increasing employment in the industrial sector to 20% of the country’s workforce — good news for retailers as the labor force expands and becomes more accessible with the help of government backing.

Unfortunately, the government is also curbing raw material exports, which could pose a problem in the future.

Top exports from Indonesia:

  • Animal and vegetable fats, oils, and waxes
  • Iron and steel
  • Electrical machinery and computers
  • Vehicles
  • Footwear

Top websites to find reliable partners in Indonesia:

Quick look: Evaluating Indonesia as a sourcing alternative

Indonesia: Sourcing ProsIndonesia: Sourcing Cons
-Growing economy
-Low labor costs (1/5th compared to China)
-Growing domestic market
-Developing infrastructure
-Regulatory issues and corruption
-Rigid labor regulations

Thailand

With its growing focus on AI, Thailand is coming into focus as a cutting-edge manufacturing industry. It’s one of the biggest adopters of e-payment systems, and its advanced digital payment software makes transactions convenient for retailers.

The biggest setback Thailand is facing is labor. Thailand’s manufacturing sector is short by nearly 500,000 workers and is still far from recovering after the lockdown era. However, recent efforts to improve procedures for migrant workers may help alleviate this challenge.

Top exports from Thailand:

  • Electrical machinery and computers
  • Vehicles
  • Rubber items
  • Plastics
  • Gems and precious metals

Top websites to find reliable partners in Thailand:

Quick look: Evaluating Thailand as a sourcing alternative

Thailand: Sourcing ProsThailand: Sourcing Cons
-Strong export economy with wide range of products
-Government initiatives to create favorable business environment
-Infrastructure and economic growth potential
-Higher labor costs, labor shortage
-Government scrutiny and interference
-Increasing tax rates

Cambodia

Cambodia has experienced rapid economic growth over the past decade with annual GDP growth averaging around 7%. However, it remains one of the poorest nations in Asia and relies heavily on foreign aid.

The US is Cambodia’s largest single-country export destination, mainly for clothing and footwear.

Top exports from Cambodia:

  • Clothing and accessories
  • Electrical machinery
  • Leather and animal products
  • Footwear

Top websites to find reliable partners in Cambodia:

Quick look: Evaluating Cambodia as a sourcing alternative

Cambodia: Sourcing ProsCambodia: Sourcing Cons
-Good trade relations with the US
-Competitive pricing for sellers
-Economy open to foreign investment
-Relies on Chinese foreign investment, so still tied to China
-Still lagging in socioeconomic development and market stability

Philippines

The Philippines has seen strong economic growth in the past few years, showing strength and resilience in the face of the pandemic’s global economic ripple effect.

Its strategic location, favorable trade relations, and skilled labor force make it a great sourcing — or service outsourcing — option for US-based businesses.

However, the country does also face challenges like inflation, infrastructure limitations, and political concerns in some regions.

Top exports from the Philippines:

  • Electrical machinery and computers
  • Medical devices
  • Copper
  • Animal and vegetable products
  • Fruits and nuts
  • Gems and precious metals

Top websites to find reliable partners in the Philippines:

Quick look: Evaluating the Philippines as a sourcing alternative

Philippines: Sourcing ProsPhilippines: Sourcing Cons
-Good trade relations with the US
-Open to foreign investment
-Large skilled labor force, particularly in services sector
-Increasing prices
-Labor shortage and underemployment
-Infrastructure and regulatory challenges
-Regional political and security concerns

Vietnam

Vietnam has promising trade policies with most countries around the globe — the EU-Vietnam free trade policy, a bilateral trade agreement with the US, and the Trans-Pacific Partnership — which means retailers will have to pay little to no export taxes.

Vietnam is often touted as the “next China” due to its significant rise in foreign trade, efforts to scale manufacturing, and increased interest from US investors.

Top exports from Vietnam:

  • Electrical machinery and computers
  • Footwear
  • Clothing and accessories
  • Furniture and bedding
  • Plastics
  • Iron and steel

Top websites to find reliable partners in Vietnam:

Quick look: Evaluating Vietnam as a sourcing alternative

Vietnam: Sourcing ProsVietnam: Sourcing Cons
-Low labor costs
-Large labor pool
-Quickly developing manufacturing facilities
-Logistics and infrastructure still lacking
-Lack of skilled labor
-Complex laws and regulations

Sourcing Alternatives in Europe

Poland

Situated in the heart of Central Europe, Poland offers diverse opportunities for sourcing. Its adoption of EU legislation and economic policies has fostered a strong and stable business environment.

Top exports from Poland:

  • Electrical machinery and computers
  • Vehicles
  • Furniture, bedding, prefab buildings
  • Plastics
  • Iron and steel

Top websites to find reliable partners in Poland:

Quick look: Evaluating Poland as a sourcing alternative

Poland: Sourcing ProsPoland: Sourcing Cons
-Strategic location with EU market access
-Well-educated and skilled workforce
-Favorable business environment
-Limitations on foreign investment
-Legislation can be unpredictable and non-transparent

Hungary

Hungary is another centrally-located European country with a lot to offer e-commerce sellers — namely, a sound infrastructure, favorable business environment, and highly-skilled workforce.

Top exports from Hungary:

  • Electrical machinery and computers
  • Vehicles
  • Furniture, bedding, prefab buildings
  • Plastics
  • Iron and steel

Top websites to find reliable partners in Hungary:

Quick look: Evaluating Hungary as a sourcing alternative

Hungary: Sourcing ProsHungary: Sourcing Cons
-Strategic location with EU market access
-Highly-skilled workforce
-Incentivized foreign investment
-Increasing inflation and rising wages
-Labor shortages
-Geopolitical risks and energy dependence

Questions to Ask Your Potential Suppliers

Now that your gears are turning on possible alternative suppliers, let’s talk about how to select the right partners for your business.

Here are some of the must-ask questions to protect your business from potential scams, unreliable suppliers, and low-quality goods.

1. Stock Check-In

The most important information to uncover when vetting suppliers is whether they have enough of the products you need.

Questions to ask:

  • How much inventory do you have on hand at all times?
  • Can you customize products according to my needs?
  • How efficiently do you handle, maintain, and document stock volumes?
  • Where do you source raw materials from?
  • Do you keep safety stock? If so, how much?

2. Customer Support

When your shipment is delayed and time is running out, your supplier needs to be a reliable emergency contact who can troubleshoot.

Questions to ask:

  • Do you offer 24/7 support? 
  • How can I reach you in case of an urgent issue outside of working hours?
  • What’s your crisis communications and management strategy?
  • Do you have translators or English speakers available?
  • What is your typical response time?
  • Can you provide automatic updates in real-time?

3. Product Quality and Standards

The more you diversify suppliers, the more important it becomes to be able to trust that each is adhering to the quality standards you expect.

Questions to ask:

  • Can you provide detailed specs and quality standards for your products?
  • Do you have any certifications related to quality and safety?
  • What is your quality control process like?
  • How do you handle quality concerns if they arise?

4. Turnaround, Major Holidays, and Delivery Schedules

Holidays and production schedules clash sometimes. Getting the information on these dates sooner rather than later can save you a lot of time and money.

Questions to ask:

  • What does your delivery schedule typically look like?
  • When are your major holidays?
  • To what extent and for how long do you typically shut down for holidays?
  • What is your turnaround time during important events?
  • Are there any recurring situations that can delay shipping and delivery?

5. Pricing and Payment Policies

Money can be complicated, especially when you have multiple currencies and fluctuating exchange rates in the mix.

Questions to ask:

  • What are your payment terms — frequency and total payable amount?
  • Do you offer any discounts for large wholesale orders?
  • What potential circumstances could increase costs? By how much?
  • Are there additional charges such as tooling or setup fees?
  • What payment options and policies do you currently have?
  • How can I make payments? What payment methods do you allow?

Supercharge Your Sourcing Strategy with the Right Funding Partner

If you’re ready to diversify your supplier network, you have options. However, navigating new supplier markets isn’t without its challenges.

From making low-cost cross-border payments to securing inventory with top-priority vendors, our team at SellersFi is dedicated to helping you reach the next level.

Check out our customer success stories to discover why 95% of our more than 400 Trustpilot reviews are five stars.

Or, if you’re ready to start growing your business, see the stellar lineup of SellersFi e-commerce finance solutions.

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