Made in China, Marketed by India Inc. Increasingly that's the sweet secret that Indian marketers are resorting to. Cheaper Chinese goods are proving to be too good to resist for Indian companies, so now they're going the whole hog — sourcing finished goods from China, importing them into the country via South-East Asia and rebranding them to sell in India.
"This trend of companies sourcing finished products and rebranding them has been increasing steadily over the past six months or so," says T. Shivakumar, group director (Asia-South), Ariba. The company, a specialised procurement firm, has helped Indian companies source goods worth Rs 2,000 crore in the past few years from China.
A fairly wide variety of companies are marketing finished Chinese goods in India. These include furnishing companies like Godrej and Usha Furnitures, which have sourced almost their entire range of modular furniture from China, and Dabur, which has sourced Chinese aerosol cans for its Odonil brand and honey for its Dabur Honey brand. Other companies marketing Chinese goods include Crompton Greaves, Archies and La Opala, say sourcing companies.
Companies with a strong distribution network have also taken to the China route for starting a new product line. For instance, the RPE Group, a Rs 1,000-crore group which is a distributor for Nippo Batteries and television sets, has imported finished infant-care products from China over the past one year with the help of B2B portal indiamart.com. The group plans to leverage their nation-wide distribution system to sell the products under the brand name Purple Turtle.
Supply chain efficiencies that specialised sourcing companies have brought to the sourcing game has changed the cost structure dramatically. The landed price, or the net price of goods after import duties and transportation, is lower by nearly 40-50% compared to goods sold by Indian manufacturers, particularly for durables. The net savings for companies work out between 10-15% by sourcing directly from China, even after stringent checks for quality.
Says Jude Magima, vice-president (supply chain management) Dabur, "We engage an independent agency to perform quality checks at source, and then we check for quality locally as well."
The products seldom fail to stand up to scrutiny, he adds. Dabur sourced aerosol sprays worth Rs 8 crore over the past one year from China and plans to increase the sourcing amount this year, says Mr Magima. After the acquisition of Balsara last year, Dabur's management mandated huge cost reductions over the course of the year for Balsara brands. Dabur managed to source aerosols 15% lower than it's target.
The impetus for sourcing finished goods has also come in part due to the increasing net-savviness of Chinese manufacturers and Indian purchase managers also scouring the net for sourcing
"This trend of companies sourcing finished products and rebranding them has been increasing steadily over the past six months or so," says T. Shivakumar, group director (Asia-South), Ariba. The company, a specialised procurement firm, has helped Indian companies source goods worth Rs 2,000 crore in the past few years from China.
A fairly wide variety of companies are marketing finished Chinese goods in India. These include furnishing companies like Godrej and Usha Furnitures, which have sourced almost their entire range of modular furniture from China, and Dabur, which has sourced Chinese aerosol cans for its Odonil brand and honey for its Dabur Honey brand. Other companies marketing Chinese goods include Crompton Greaves, Archies and La Opala, say sourcing companies.
Companies with a strong distribution network have also taken to the China route for starting a new product line. For instance, the RPE Group, a Rs 1,000-crore group which is a distributor for Nippo Batteries and television sets, has imported finished infant-care products from China over the past one year with the help of B2B portal indiamart.com. The group plans to leverage their nation-wide distribution system to sell the products under the brand name Purple Turtle.
Supply chain efficiencies that specialised sourcing companies have brought to the sourcing game has changed the cost structure dramatically. The landed price, or the net price of goods after import duties and transportation, is lower by nearly 40-50% compared to goods sold by Indian manufacturers, particularly for durables. The net savings for companies work out between 10-15% by sourcing directly from China, even after stringent checks for quality.
Says Jude Magima, vice-president (supply chain management) Dabur, "We engage an independent agency to perform quality checks at source, and then we check for quality locally as well."
The products seldom fail to stand up to scrutiny, he adds. Dabur sourced aerosol sprays worth Rs 8 crore over the past one year from China and plans to increase the sourcing amount this year, says Mr Magima. After the acquisition of Balsara last year, Dabur's management mandated huge cost reductions over the course of the year for Balsara brands. Dabur managed to source aerosols 15% lower than it's target.
The impetus for sourcing finished goods has also come in part due to the increasing net-savviness of Chinese manufacturers and Indian purchase managers also scouring the net for sourcing
