When you ask why Chinese products are cheap, one of the first things that comes to your mind is the large population of China, because when you have a large population, the cost of labor is certainly low.
Compared to India, China there are not many more inhabitants, so again the Chinese economy is much stronger and more advanced and Chinese products are cheaper.
Here we will try to explain why this is so.
China and India are the two most populous countries on the planet, and again India is flooded with Chinese products.
Chinese products have flooded the Indian market, and they are competing with products made in India.
The Government of India has tried to level the playing field between these countries by introducing policies and schemes like Make in India.
The Make in India initiative was taken to strengthen Indian industry and promote Indian products, but everything is going much slower than in China
China is the largest exporter of products in the world, exporting a staggering 2,100 billion dollars, against 1,453 billion dollars of the USA and 1,340 billion dollars of Germany. (data from 2018)
What is surprising is that Chinese products in India especially cheap compared to Indian products.
Chinese products sell better everywhere, because we all prefer cheaper alternatives to more expensive ones, regardless of quality.
Why can't India, as another populous, large and resource-rich country, compete against China by making cheap products?
China is geographically better positioned and abounds in vast material and resources, and their machines and technology are far more advanced than India's.
Wages of workers in India are relatively low, which makes them reluctant to work efficiently.
Although salaries in China can also be low, they are constantly increasing every year.
It makes workers do their jobs more efficiently by producing more products.
China is more developed than India
China is a proportionally developed country when it comes to the urban-rural population ratio, while in India 70% of people live in the countryside.
Those villages are quite scattered, often inaccessible.
That is why the availability of electricity is a primary problem in India.
Many factories have electricity for a limited time, which means that they cannot operate at full capacity and do not produce goods all the time.
This makes mass production impossible.
Banking and judicial system
China has a stronger, safer banking and credit system, while India lacks something like that.
Loans are easy to take in China, especially for large companies, so they have more financial support for producing products, and that on a very large scale.
Indian companies find it difficult to get loans from banks, and foreign investors are not willing to take risks with them.
Without sufficient financial support, it is difficult for someone to commit to mass production.
Without mass production, the selling prices of Indian goods are higher, which reduces the demand for them.
India's judicial system and government are slow, so laws, regulations and reforms related to manufacturing companies take time to pass.
China does not have this problem and reforms that mean potential progress are being introduced quickly.
Perhaps most important of all, the level of corruption in China is low, while in India it is very high.
Practice of illegal coupling between business and government results in loss, general loss and uncompetitiveness of business and Indian products.
Although India is the fastest growing nation, it lags behind other countries in terms of workforce satisfaction and anti-corruption measures.
India is a potential new great power that is trying to develop its production and sales of products, it also has its own www.indiamart.com which is equivalent to Alibaba and Made-In-China sites.
IndiaMART
IndiaMART is India's largest B2B online marketplace that connects buyers with suppliers.
With a 60% B2B market share in India, IndiaMART focuses on providing platform services to SMEs, large enterprises as well as individuals.
Established in 1996 with the idea of facilitating business with Indian companies. Although it was created before Alibaba, today in terms of size they cannot be compared.
Inida March today has
98 million+ customers | 5.9 million + suppliers | 66 million + products and services
IndiaMART for Buyers
- Convenience of connecting with sellers anytime, anywhere
- Wider marketplace with a range of products and suppliers
- Payment Protection Program
IndiaMART for Suppliers
- Enhanced Business Visibility
- Access to 1 Million Days of customer inquiries
- Increases credibility of your brand
- Payments through the IndiaMART system
IndiaMART has 3,373 employees in 77 offices across the country.
* All listed data are from December 2019
Indiamart is basically an intermediary between buyers and sellers.
Even though the app/website there says that the sellers are verified, there are also verified sellers who are scammers, so before you buy anything, before you pay, ask about the details of the company and the seller.
If possible never make payment before product delivery.
Be sure to use Indiamarts new free payment insurance service, and never pay directly to sellers, as many forums mention that Indiamart has a number of verified fraudsters.
Besides the leading IndiaMART.com there are other B2B Indian sites like:
www.tradeindia.com/
www.eleb2b.com/
www.fibre2fashion.com/
india.tradekey.com/
www.toboc.com
www.ficci-b2b.com/
www.allactiontrade.com/
www.exportersindia.com/
www.bazara2z.com/
www.smeshops.com/
