In recent years, the COVID-19 pandemic has hit the global economy, triggering the shift of consumer electronics supply chains overseas. So more and more consumer electronics brands are building assembly plants overseas to reduce production costs and disperse risk.
Supply Chains Shift to Lower-Cost Countries
Apple has long relied on Chinese suppliers for 90% of its production, with the key iPhone factory – Zhengzhou Foxconn, contributing 80% of iPhone production. Chinese suppliers also make up over 35% of Apple’s core supply chain, including component manufacturers such as BOE, Sunny Optical, and GigaDevice.
However, Apple is seeking more partners in Southeast Asia for lower-cost manufacturing, with countries like India and Vietnam joining its diversified supply chain plan. In addition, other international electronics and component companies, like BOE, are also investing in low-cost countries like Vietnam for partnership opportunities.
Challenges of Supply Chain Shifts
Southeast Asia countries are popular destinations for supply chain shifts of consumer electronics due to their cost-effectiveness and favorable tariff policies. However, since they cannot match Chinese consumer electronics manufacturers in terms of infrastructure, land area, and production capacity, most companies have shifted only some of their product lines to Southeast Asia countries for assembly.
China remains the primary source of raw materials for Southeast Asia. The more supply chains are transferred to Southeast Asia, the greater the demand for Chinese supply chains. The investments can be significant if investors want to form new teams of raw material suppliers outside of China. In addition to building infrastructure and raw material factories, additional resources must be devoted to professional training to ensure that all workers meet industry standards.
Behind the diversified supply chains, more and more consumer electronics companies are looking to gain a higher market share and profits by shifting their supply chain out of China. However, for investors or brands working with local factories in India or Vietnam, it is difficult to predict how quickly these huge investments will pay off.
Why Made in China Still Attracts Global Buyers
Despite the recent shift in the consumer electronics supply chain, China continues to attract global buyers due to its broad industrial categories and globally recognized infrastructure. Moreover, China’s industrial organization capabilities and supply chain resilience are so strong, occupying an important position in the global industrial division of labor and supply chain systems.
Improvement of Employee Benefits in China
In recent years, employee benefits in China have improved greatly, leading to a more skilled and motivated workforce. Better employee welfare can improve employee morale, reduce employee turnover and attract more skilled labor, despite some increases in labor costs.
A stable workforce in OEM manufacturing can reduce the risk of production and delivery delays, creating a more robust and reliable supply-demand relationship. Moreover, creating a safer and healthier working environment helps provide standardized production, increasing efficiency and productivity.
In line with this, improving employee benefits is a vital aspect of the social responsibility of the Business Social Compliance Initiative (BSCI). Starmax Technology, approved by BSCI, has been recognized for its commitment to promoting fair labor practices, safe working conditions, and ethical business behavior. As a result, all products you buy from Starmax are manufactured according to ethical standards and responsible labor practices.
Great Quality Control
Made in China is world-renowned for its reliability, durability, and superior performance. Chinese manufacturers place great emphasis on quality control and continuous improvement. Through a commitment to using cutting-edge technology and strict quality control procedures, Chinese-made products have earned the trust and confidence of consumers worldwide.
ISO (The International Organization for Standardization) creates and releases international standards for various industries. For example, they have published ISO 9001 to outline the requirements for a Quality Management System (QMS). Manufacturers adopt the standard to consistently demonstrate their ability to provide goods and services that meet customer and regulatory needs.
With ISO 9001 certification, Starmax Technology has a competitive advantage in the global market by ensuring high-quality products and efficient management. By implementing strict testing and inspection throughout the production process, Starmax can detect potential problems early, reduce the chance of defects and maintain the highest production standards. In addition, Starmax is constantly looking for ways to optimize processes and exceed customer expectations.
Preferential Policies
In recent years, China’s consumer electronics industry has developed rapidly. It has become a crucial driving force for the country’s economy. The development of China’s consumer electronics industry has created a large number of job opportunities. As a result, it has significantly contributed to the country’s economic growth and employment.
The Chinese government has implemented a series of supportive policies to drive the growth of this industry in recent years, creating a favorable development environment and promoting the progress of the industry. Starmax Technology has received various policy supports as a national high-tech enterprise, such as national science and technology plans. As a result, its capabilities of comprehensive innovation and independent research and development have been continuously enhanced.
Moreover, these preferential policies have attracted many consumer electronics manufacturers to establish production bases in China, bringing in advanced technologies, management experience, and capital. A skilled labor force ensures efficient and high-quality production, while a well-developed production line allows manufacturers to bring their products to market quickly. This helps China’s consumer electronics manufacturing remain competitive and innovative globally.
Benefits of the Chinese market
China boasts the most potential consumer market globally. It is located in the heart of Asia, in a prime location between the important markets of Asia, Europe, and North America. Such a geographical advantage makes it a breeze to host product sourcing, trade shows, quality control visits, and other events in China.
China’s emerging industries are snowballing with clear benefits from its new-style industrialization and innovation-driven development. Most consumer electronics manufacturers, suppliers, and products are located in or near major cities such as Shanghai, Shenzhen, Guangzhou, and Beijing. Vast labor and material resources, combined with a highly centralized supply chain system, allow for the rapid and economical delivery of goods, ultimately increasing the efficiency of all services.
Flexible Response to Global Challenges
After decades of economic development, China has accumulated rich experience dealing with global challenges. It can effectively deal with global challenges with a strong material foundation, complete infrastructure, and enhanced support capabilities.
Even under China’s strict Zero-COVID policy in 2022, China’s GDP still ranked second at about US$18 trillion. Moreover, after reopening, China’s economy began to normalize, thanks to the government’s orderly deployment of labor, material resources, and funds to promote the resumption of work and production.
Opportunities from Supply Chain Shifts
Despite the trend of consumer electronics brands seeking to diversify their supply chain globally, most of their global shipments and core support still come from China. These brands may reconsider their international expansion strategies, but nothing will diminish the impact of Made in China.
Since the Apple watch series 7, Vietnam has occupied a big portion of the Apple Watch global shipments. However, Chinese smartwatch makers have not disappeared because of losing Apple Watch’s production share. On the contrary, such a challenge has even promoted the transformation of China’s smartwatch factories – from Apple foundries to self-developed smart watch manufacturers.
With the rapid growth of the smartwatch industry and increasing demand for these products, China’s smartwatch supply chain has matured considerably. This maturity enables Chinese smart watch manufacturers to be self-sufficient and have more spare capacity to contract well-known IP peripheral linkage or meet the needs of foreign OEM orders. The sophisticated supply chain in China has secured its position as a key player in the global industrial division of labor and supply chain systems.
The famous smartwatch supplier – Starmax Technology has been assigned to produce smart watch souvenirs for the 2022 Worldcup in Qatar. While ensuring its regular stocking, Starmax was able to deliver smartwatch souvenirs for the 2022 Worldcup in Qatar on time with high quality and quantity. This is not only a demonstration of its ability to cope with mass production but also a reflection of its good reputation.
Conclusion
India and Vietnam are not China. Made in China has already formed a cluster effect to satisfy large-scale, fast, and high-quality production. However, they cannot produce reliably at the same scale, quality, turnaround time, and infrastructure as Chinese manufacturing. Well-established infrastructures, complete supply chains, and sufficient cheap labor are essential for efficient production.
If you are looking for a smart watch manufacturer in China, you can send your questions or requests to the Starmax team through the form below. Also, you can get our catalog for more smart watch customization ideas.
