Investing in “made in Spain” design and manufacturing in China is an advantageous way to save costs while maintaining the quality of products. Raw materials and labor are much cheaper in Asian countries, resulting in higher profit margins.This is one of the main reasons why companies prefer to focus on design and outsource production to Chinese factories. Pioneering sectors in this business model include toys, consumer electronics, textiles, footwear, and plumbing. Specifically, the number of Chinese faucet factories has grown exponentially, from forty to 3,000 in the last two decades. Currently, 90% of faucets installed in Western homes are manufactured in the Asian country.Production of fashion garments, footwear, faucets, and toys lead Chinese manufacturing with Spanish design to achieve higher profit margins.The textile sector is another major user of manufacturing in China for garments designed in Spain. The removal of entry barriers by the European Union for textile products manufactured in Asia has influenced the growing importation of clothing. Spain is one of the EU countries that markets the most clothing produced in China.Toys, footwear, and consumer electronics are moving in the same direction: China manufactures eight out of every ten toys produced worldwide and almost all mobile phones.
Main Reasons for Manufacturing in China
The reasons entrepreneurs find to outsource their production to China are diverse:
- Production costs are reduced without having to invest in a factory
- With these savings, it is possible to allocate more resources to innovation and development, making the company more competitive
- It is possible to have multiple suppliers flexible enough to adapt to rapid changes, especially in technology and fashion
- Synergies are created that allow Spanish products to be marketed in Asia
The Spanish toy sector is one of the most traditional in subcontracting production to Chinese factories. Sometimes components are produced separately, resorting to the best suppliers for each type of piece, both in price and quality. The Dong Yuan region, near Hong Kong, concentrates most of the world’s toy production.The footwear industry is also gradually encouraged to produce both the finished shoe and some of its components in China and other countries with lower labor costs to gain competitiveness while maintaining quality.Outsourcing to China is no longer synonymous with low quality. A careful selection of raw materials, good design, and the interest of Asian suppliers in improving their finishes are contributing to consumers not feeling distrust in products manufactured in China.
