In this article we are going to share the important reason why Chinese market is cheap.
Why should you buy in a Chinese Market?
1. Chinese market has a huge, cheap supplier base
Yiwu with its neighborhoods forms the leading private/family owned factory base in China. After 20 years of running their machines day and night, they already fished off numerous factories in Europe and America.
Now they are the most competent manufactures in the world and they’re not only the largest, but also the cheapest.
2. Scale Effect
As so numerous factories gathering, including many big ones, the scale effect shows its power. Logistics cost, marketing cost lessen. Parts, accessories, materials, even production lines prices all reduced considerably. The more factories rise, the lower prices there will be.
3. Vast Battleground
Yiwu market became the world largest wholesale Chinese market for daily using items. As it rises, more and more factories, not only factories from nearby areas, but also other Chinese markets, are putting their products on this market, to fight for a bigger share.
4. Sturdy Government Support
While all China perceived free market as an evil character of capitalism, Yiwu already opened its free market in 1982, which is one of the earliest free markets in whole China.
In the last 30 years, Yiwu government put almost all their money and energy to build Chinese markets. Then rent shops to venders at very cheap rentals. Private companies are not permitted to get into Chinese market building business. All Chinese markets in Yiwu are built by government and run by a government selected company.
In this way, Yiwu draws more and more vendors from all over China by its cheap shop rentals. As a result, factories from cities like Wenzhou, Ningbo, Shantou, even Guangzhou, where tons and tons of products were manufactured each day for exporting, came to Yiwu market in groups to sell their products.
With these strong backup from government, Yiwu market kept prices at tremendously low level for three decades in the past. And there shows no indications that this situation will change soon.
5. “One-Cent-Profit” Making Money
Businessmen of Yiwu and its nearby areas are famous for hard-working and alertness. They’re intense on every “one-cent-profit” businesses opportunity.
For example, the income of one sewing needle is just about 1/10 cent RMB, the income of one straw is just 1 cent RBM. But if you can sell containers of them in one month, you can still get a decent profit.
As long as there is a profit, whether if its big or small, these so called “ants’ businessmen” would desperately go for it.