Some things in China are so cheap that it makes sense for you to fly down here to buy it, and you would still save a ton of money...
I’ll explain the general economics of how prices work in China...
For context, I’m comparing things with how much it costs in tier 1 Indian cities like Gurgaon, Mumbai, Bangalore...
A meal outside at a nice restaurant is about Rs 800-1200 per person
Hotel accommodation at five star properties are at Rs 8-15k per night
Cabs in general cost you very similar to Uber rates in India... I personally think maybe 10% cheaper
Cost of living is pretty much the same - so most everyday groceries, fruits, food is in a similar range with a much wider variety.
Now, let’s talk about goods like furniture, electronics, fashion accessories and most consumer durables...
What you get in India for Rs 10,000 - you get the same thing in China from a trader in a wholesale market for sub Rs 3,000
Most things are at a quarter to a third the price or close to 30% of the selling price to a consumer in India.
Now, you add costs of shipping, custom duties, goods clearance at your port and shipping to your doorstep...
While it varies across categories, on a thumb rule basis, you will get the same thing at 1.75X the China price to your doorstep.
Even then, the cost is sub 55% of the price at which you buy in India.
And given the cost for 2 people to come down to China can be about Rs 1.5 Lakhs for a week long trip... broadly, if you have to buy things worth over Rs 5 lakhs, it makes sense to come specially to China to do this.
Some categories now have BIS standards and rules, and additional custom duties, where the government is promoting Make in India through PLI schemes... where this may not work perfectly, but you get the drift.
Now, where should you be going to in China for sourcing?
For most things in fashion, leather, bags, beauty, it’s Guangzhou
For most electronics, it’s Shenzhen
For furniture, it’s Foshan
And for most other household goods, it’s Yiwu
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.
Sarthak Ahuja