Yiwu: Commodity Hell or Sourcing Mecca

Yiwu: Commodity Hell or Sourcing Mecca?

Source: www.AmandaIEC.com professional Sourcing Agent in Yiwu China.

There are so many economic miracles and overnight fortunes stories putting on the stage day after day in our country, but this city is an exception.20 years ago, it’s a rural area surrounded by rising and falling in long gentle slopes mountains. But right now, it becoming the main bridge links all the places all over the world. So ideal city that some of you may guess it must be Shenzhen for it’s close to Hongkong, access to the sea and it’s the first special economic zones in China, so it’s developed quickly like the speed of light,and others may guess it’s Shanghai or other coastal metropolis with long-standing ties to the international-bisiness community.But the answer is so surprised,nong of them. It’s name is Yiwu, a small town in East China’s Zhejiang Province.Today, it blooming to be the largest wholesale markets, it has another name called “Purchaser’s Paradise” , where attractive thousands of businessmen around the world for it’s lowest prices on the cognated products.

But how and why did the markets develop so quickly just in a period of two decades, how did this isolated farming town with no port, without a large (by China’s standards) or skilled (by any standards) population base, nor access to any noteworthy raw materials, develop into a major player in the global supply chain?

Haresh Ahuja, an Indian sourcing agent, raised in Hong Kong, who has been coming to Yiwu for more than a decade give us an answer. At that time, Yiwu didn’t have the factories, epic wholesale shopping centers or the accompanying luxury hotels. Yiwu started out as a ‘stock market,’ he said. If a manufacturer’s client rejected items for quality control or some other reasons, the stock was shipped here. Sometimes the goods were completely defective, so they would be sold for well below the cost of production (and often below the cost of raw materials). A guy from Africa might come and buy 10,000 TV remote controls, none of which actually work, but maybe he knows that he can strip out some of the components and resell them for more than he has to pay here. Other times there were minor problems that might not affect a less distinguishing customer.

By the mid-nineties Yiwu was already known as “the place where you could buy shit for the price of shit.” Recognizing the smell of a good deal, customers came in flocks, especially from developing countries where price took precedence over quality. We are talking about the cheapest place on Earth to buy generic, commoditified products: buttons, Christmas lights, nail clippers, hammers, coat hangers, inflatable balls, zippers, whatever you can think of. But if you think of something new, don’t tell anybody here, because they will start copying your idea within 5 minutes. According to Wikipedia, “Yiwu is also known as sock town” as it produces over three billion pairs of socks for Wal-Mart, Pringle and Disney annually. ” This is Jack Welch’s ‘Commodity Hell.’ It’s a real place, and to everybody’s suprise gorgeous green peaks surround the place.

Well, eventually as more and more buyers came to Yiwu, Chinese businessmen recognized the opportunity. Instead of just sending unwanted stock, why not set up production specifically for the demands of the Yiwu market. Even better, let’s build the factories right in Yiwu to save on shipping costs and reduce delivery times.