Asia represents substantial sourcing opportunities for the Western professionals who know how to navigate the different business cultures and local customs. Those opportunities go beyond sourcing in China. Indeed, a number of ASEAN countries and India are attractive for European medium-sized countries as the limited purchasing volumes of those SMEs can represent a barrier to access the Chinese sourcing market where the Minimum Order Quantities (MOQ) are sometimes too high for them. In this short presentation, we walk the reader through the main benefits as well as the challenges to overcome for a European professional who want to start buying goods in Asia. The report also lists a number of solutions to mitigate the risks of European sourcing in Asia. This is rather an introduction and is not fully complete. Should you want to exchange your thoughts or own recommendations, feel free to do so in the comment box below or drop us a note at relations@eurosia.eu. You will also find more similar presentations on our blog: http://www.eurosia.eu/blog Enjoy the reading!

1. EUROPEAN
SOURCING
IN
ASIA:
KEY
BENEFITS
&
CHALLENGES
(and how You can mitigate them)!
Eurosia™
Sourcing
Insight
#1

3. Eurosia™
Sourcing
Insight
#1
THE
4
KEY
BENEFITS
YOU
CAN
EXPECT

4. Sourcing
in
Asia
is
the
main
lever
to
reduce
costs
of
material
and
labour
30%
Savings
20%
Savings
5%
Savings
Sourcing
in
Asia
Redesign
to
cost
(RTC)
with
R&D
Nego:a:on
Source:
C.
Horvat,
Eurosia’s
Seminar
”(Out)sourcing
in
Asia”
(March
28,
2014)
RTC
depends
on
R&D,
and
negotiation
has
limits

5. #1
LOWER
MATERIAL
COST
Eurosia™
Sourcing
Insight
#1

6. Successful
companies
focus
on
products
&
materials
with
high
saving
potential
and
low
risks
Source:
:
Sourcing
volume
C.
Horvat,
Eurosia’s
Seminar
”(Out)sourcing
in
Asia”
(March
28,
2014)

7. #2
(MUCH)
LOWER
LABOUR
COST
Eurosia™
Sourcing
Insight
#1

8. Worldwide
relative
mapping
of
monthly
cost
per
worker
(fully
loaded,
EU/US
=
100)
100
90
80
70
60
50
40
30
20
10
0
France,
USA,
Singapore,
Hong-­‐
Kong
Slovenia,
Taiwan,
South
Korea
Poland,
Czech-­‐
Republic,
Hungary,
Mexico
Morocco,
Tunisia
Russia,
Romania,
Thailand
India
Central
China,
Bangladesh,
Vietnam
Source:
C.
Horvat,
Eurosia’s
Seminar
”(Out)sourcing
in
Asia”
(March
28,
2014)

9. #3
INCREASED
OUTPUT
CAPACITY…
Eurosia™
CEO
Insight
#3

10. …
reducing
the
shortage
risks
thanks
to
alternative
supply
sources

11. #4
Opening
a
window
to
growth
markets
in
Asia
at
relatively
lower
risks

12. Investment
&
Development
opportunities
across
India
4.7%
China
7.8%
Vietnam
5.2%
Singapore
1.3%
Myanmar
6.3%
Indonesia
6.2%
NOTE
FROM
EUROSIA:
GDP
Growth
Rates
(World
Bank,
2012)
growth
Asia
will
be
addressed
in
our
future
Eurosia
Country
BrieYings
Thailand
6.5%
Malaysia
5.6%
Philippines
6.8%

13. THE
4
KEY
CHALLENGES
YOU
WILL
FACE
(and how you can mitigate them)!
Eurosia™
Sourcing
Insight
#1

14. #1
LOW
QUALITY

15. Eurosia™
CEO
Insight
#3
FIRST
MITIGATION:
deYine
and
communicate
your
expectations
well
VISION
+
RESOURCES
=
REALISTIC
EXPECTATIONS

16. SECOND
MITIGATION:
start
with
mature
products
and
keep
your
Yirst
order
small…
…while
remembering
that
suppliers
will
also
assess
your
real
Volume
&
Commitment
before
committing
themselves
(!)

17. THIRD
MITIGATION:
follow-­‐up
with
continuous
quality
controls,
on-­‐site
inspection
and
reporting

18. #2
HIDDEN
COSTS
Eurosia™
Sourcing
Insight
#1

19. Low
Labour
Costs
Travel
Cost
Productivity
Losses
(learning
curve)
Risk
Management
Cost
Cost
of
Management
Overhead
Low
Materials
Cost

20. MITIGATION:
get
the
required
expertise
and
prepare
well
(If
you
don't
have
the
knowledge
or
country
coverage
required,
it
is
worth
the
extra
expense
to
get
experts
on
your
team)

21. #3
INTELLECTUAL
PROPERTY
(IP)
Eurosia™
Sourcing
Insight
#1

22. MITIGATION:
carefully
identify
and
keep
your
Core
Business
in-­‐house
•
New
products
•
Patented
components
•
Fundamental
R&D
•
Value
analysis
•
Integration
skills

23. #4
INTERNAL
RESISTANCE
Eurosia™
Sourcing
Insight
#1

24. Resistance
to
change
from
employees
is
one
of
the
greatest
challenges
you
may
face…

25. This
topic
will
be
addressed
in
our
next
Eurosia™
Sourcing
Insight:
HOW
TO
MAKE
MY
TEAM
WORK
WITH
LOW-­‐COST
COUNTRIES
well!
Get
it
FREE,
subscribe
here:
eepurl.com/RaIbn

26. ABOUT
EUROSIA™
Eurosia
S.A.
(www.eurosia.eu)
is
a
European
sourcing
service
provider
headquartered
in
Luxembourg
with
a
presence
in
six
European
and
eight
Asian
countries.
Our
team
of
experts
enable
the
European
technology,
industrial
and
construction
companies
be
more
competitive
and
innovate.
We
deliver
bottom-­‐line
results
to
our
clients
thanks
to
our
methodology
and
on-­‐the-­‐ground
experts
in
the
sourcing
of:
CNC
machinery
w
Construction
material
w
Electric
components
w
Mining
&
Quarrying
machinery
w
Oil
&
Gas
equipment
w
Packaging
equipment
w
Raw
materials
w
Renewable
equipment
w
Steel
pipes,
beams,
structure
w
Telecom
equipment
Our
team
identilies
&
selects
manufacturers
as
well
as
sources,
controls
and
buys
products
in
China,
India,
Indonesia,
Malaysia,
the
Philippines,
Thailand,
Vietnam.
THEY
TRUST
EUROSIA™:
Our
tenured
European
managers
deliver
local
project
coordination
and
client
relations
in
English,
Deutsch,
français,
italiano,
Nederland.
Why
European
technology
and
industrial
lirms
choose
Eurosia™:
Deliver
attractive
cost
reductions
w
European
supervision
in
Asia
DIGITAL
AGENCY
w
European
quality
control
w
One-­‐
stop-­‐shop
in
Europe
and
Asia
w
Flexible
engagement
model

27. TM
E U R O P E A N S E R V I C E . A S I A N P R I C E
relations@eurosia.eu