Global product sourcing has allowed businesses around the world to tap into a wider range of products and services and innovative technologies. Over the past few years, the strategies for sourcing products have changed dramatically.

Advances in technology and communication, the availability of high-quality labour at lower costs in developing countries, and improved skills and strategies in global supply chain management are chief among them.

While global sourcing was mainly based around cost savings in the past, it has evolved to focus on strategic partnerships, quality improvements, and access to innovation. It is much more than a transactional process now—it is a collaborative strategy that stresses the importance of building long-term relationships and enabling mutual growth.

Current trends in global product sourcing

As global supply chains and strategic sourcing operations evolve, new trends form and businesses hoping to stay ahead of the competition must be aware of them. Let’s explore some key trends that have emerged over recent years that you should be aware of.

  • Data-driven decision-making
    Technologies like AI and analytics are enabling businesses to make more data-driven decisions that support both their short-term goals and long-term strategies.
  • Sustainability and social responsibility
    Sustainability is an increasingly important consideration, especially in today’s environmentally and socially conscious landscape. This has resulted in an increased focus on ethical sourcing and the environmental impact of supply chains.
  • Procurement technology
    Procurement technologies like eProcurement platforms, spend analysis tools, and supplier management software are streamlining sourcing processes and enhancing supply chain visibility.
  • Global expansion
    Sourcing strategies have expanded beyond traditional markets as businesses look to diversify their sourcing strategies. This contributes to risk mitigation as well.
  • Strengthened supplier relationships
    Businesses are focusing on collaborative approaches to supplier relationships to enhance supply chain resilience and adaptability.

The ins and outs of global sourcing

These days, businesses can face a myriad of challenges when navigating the global sourcing landscape. Geopolitical instability and the intricacies of cultural and language barriers must be overcome to establish an effective, sustainable product sourcing strategy.

Establishing and following best practices like rigorous due diligence for compliance and quality assurance, supplier relationship management for efficient supply chains, and technology usage for competitive advantage is vital.

This not only helps mitigate global supply chain risks but also improves operational efficiency and provides a competitive advantage.

Zignify’s approach to global sourcing

Founded in 2005, we aim to provide high-quality product sourcing options to our clients while also ensuring they contribute positively to the world—economically, socially, and environmentally.

Our mission is to connect businesses with the best manufacturers worldwide, negotiate favourable terms, and optimise the sourcing process—from quality control to logistics.

Our strategy is rooted in an expansive network and a deep understanding of global markets. We have an active presence in Asia, Europe, Africa and America so that we can cover all emerging markets and closely work with both businesses and suppliers across these areas.

As anyone might have guessed, one of our primary markets for suppliers and manufacturers is China. However, that’s not where it ends. This is the story of our journey beyond China to diversify our global sourcing strategies.

Beyond China: Our global sourcing strategy

One question we often encounter is, “Do you only source products from China?” The answer is a resounding “No.” In fact, we have continued to diversify our product sourcing strategy, moving away from exclusive reliance on China. Let’s take a closer look at the trajectory of our sourcing efforts over the past few years.

Approximately two years ago, a mere 10% of our projects involved sourcing from outside of China. However, the sourcing landscape has significantly evolved since then. Today, around 40% to 45% of our projects still originate in China, while the rest come from various locations across the globe.

Driving diversification

What propels this diversification in our sourcing strategy? The answer lies in the pursuit of robust and reliable supply chains. Our sourcing now extends to other Asian countries, such as Vietnam, Malaysia, Thailand, Indonesia, and even countries further to the west, including India, Pakistan, and Bangladesh.

Beyond Asia, we have observed a noteworthy trend among our European sellers and brands. There’s a shift away from exclusive production within Europe, the EU, or Turkey. Notably, Africa is emerging as an increasingly appealing production hub. Chinese companies and government initiatives are directing substantial investments into Africa, envisioning it as a manufacturing epicentre, often referred to as ‘China’s China.’

For our U.S. sellers, regions like the Mexican market, South America, and of course, the U.S. and Canada, are emerging as promising sourcing alternatives. But why the move away from exclusive reliance on China for our sourcing efforts?

Challenges and considerations

Over the past two years, the global supply chain has encountered a series of disruptions. Factory closures, soaring order backlogs, and shipping challenges, including the notorious Suez Canal blockade, have posed substantial obstacles. These disruptions have underscored the need for diversification to ensure a stable supply chain.

An additional critical consideration, especially pertinent to us in the U.S., is the intricate economic dynamic with China. Since 2018, an ongoing economic standoff has led to the imposition of significant import tariffs, ranging up to 25% or even higher, occasionally peaking at around 47% to 48%. As a consequence, it frequently proves pragmatically beneficial for us to explore sourcing from other Asian countries with lower or even zero import duties. Additionally, we’ve been increasingly drawn to a ‘near-shoring’ approach, where production is situated closer to the U.S., as seen with options like Mexico or South America.

Expansive sourcing strategy

Our sourcing strategy is no longer limited to China; it now encompasses multifaceted locations worldwide. To provide a snapshot of our journey over the past few years, we initially embarked on this path with only 10% of our projects stemming from sources outside of China. At present, around 40% to 45% of our projects still have ties to China, while the remaining projects span the globe.

Diversify your global product sourcing strategy with Zignify

If you are looking for options to diversify your global sourcing strategy and unlock the benefits of an expansive supply chain, reach out to Zignify.

Our team of experts is ready to assist you if you require any further assistance or additional refinements. We are committed to helping you navigate the evolving landscape of global sourcing, ensuring a stable and efficient supply chain for your business.