Wednesday 10 February 2010

Outsourcing in China, an FMCG opportunity for whom?

Those suppliers who continue to see China merely as a source of cheaper production, should visit the Spring Fair at the NEC. The FT reports that Chinese businesses have almost quadrupled their presence at one of the UK’s biggest gift and homeware events as they seek to build international brands and to raise margins by selling directly to British retailers.
Last year just 65 Chinese businesses exhibited at the Spring Fair, held annually at the National Exhibition Centre in Birmingham. This year 244 companies are showing off their wares, in most Halls.

It is a logical move. A high proportion of the goods that British distributors and wholesalers offer to retailers at the Spring Fair are made in China anyway so the Chinese are merely seeking to cut out the middlemen.

Why not apply this approach to FMCG products, and think about opportunities for chinese producers to enter the UK via private label, whilst they build chinese brand franchise here, in appropriate categories?

Incidentally, this year the Spring Fair organisers appear to have relegated the chinese exhibitors to the back-end and least accessible locations in each hall.

Is anyone prepared to take bets on how quickly the tables are turned vs. traditional exhibitors in capturing the traffic hot-spots in next year's Fair?

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