Covid-19 - What it Means For Manufacturing in China - Sourci Australia Update

Ellie Vaisman

Mar 27, 2020 | 7 min read

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Hey World,

Things are a little bit uncertain, right?

You might be wondering, what does this mean for manufacturing in China, in Asia, for the Australian economy?

Well first and foremost, we at Sourci want to say that we wish the Australian & New Zealand people a world of good health, safety, and comfort whilst going through one of the most stressful, sad, and unique times in all of our lives. We will get through it, and we all have an important role to play.

In our Melbourne office, we are being inundated with inquiries from businesses both small and incredibly large, all the way from teeny mum & dad startups through to the other end of the spectrum with large national and statewide government organisations requiring our assistance.

First things first, yes we can supply SANITISER, MASKS, GLOVES, and all health/ protection equipment. We are here to help, and we are utilising our 2 offices in China to supply Australians & New Zealanders in need, who need to stay safe & protected. We are indeed here for you.

In regards to the economic situation, and those inquirers asking about the forecast: The truth is nobody knows, but what we are seeing a massive increase in, is e-commerce activity.

People are home, people are online. Simple as that.

The smart business people are building their businesses right now, in preparation to launch and be online & ready with their masterpieces for when things bounce back mid-2020.

And bounce back, they will.

As soon as the economy begins showing signs of life, it will snowball, sentiment will gain momentum, the stock market could likely be in the green for weeks, it's as simple as "what goes down, must come up" (does that sound right?).

It's only logical, people will begin coming out of their houses, returning to normal life (slowly), sentiment in the economy will increase, and things start growing and coming out of our very "depressed" contraction state.

Phases of the Business CycleDefinitely show this one to Scomo, he'll be a hero soon, and extremely deservedly.

What we would say to those inquirers that are determined business people, or spiring entrepreneurs, is that right now is the time to be planting the seeds. To be developing your products, honing your craft - if you will.

What most people don't realise, well most who haven't experienced bringing products to life & going through R+D for new lines of private label items, or inventions... Is that this process takes a lot of time, and the longer you have to perfect your offering the better.

The key point is that China is in full operation, they are manufacturing, they are at work, they have contained the virus and the affected areas are very limited. Well that is what they tell us of course, who knows, but we at Sourci are also going off our day-to-day interactions.

What we are seeing is that 100% of the factories that we are talking to, are all in production, at work, operating exactly as per normal.

So, if you are thinking of getting into a new product-based business in 2020, or bringing a new product to life for an existing business, then now is the time to be talking to manufacturers, ordering samples, creating prototypes, negotiating costs down, creating beautiful packaging concepts, building out websites, creating e-commerce ecosystems, and designing your business life for when the economy begins to rise from (not the ashes we hope) it's hibernation.

You might not be aware of just how long the setup phase takes. It takes months upon months to develop a new product, to find the right factories, to create proprietary products, even to simply put together a contract, place a production order and ship it over, this is easily 2 months. That's 60 days just FYI.

You see, China went through all of this over a month ago. And their government is very different to ours, they enforced strict lockdowns that the people had to follow (imagine disobeying such a powerful dictatorship/leadership). So they successfully contained it. Yes that is what we are experiencing. Again, this is what we are led to believe, but it is also proving to be in line with what all of our team members are all witnessing. Full resumption of economic activity.... and that is a very good sign.

So this brings us all hope, hope that foremost and certainly most importantly, that our economy, our civilisation, our people, and our livelihoods are all going to resume to what we hope to be full capacity within a considerably short space of time, that the smoke will indeed clear, the hazy cloud of both bizarre insanity and extremely justified insanity will also lift & disperse, and that it'll be business "as usual" before we know it. Although it certainly won't be the same, and not exactly as we know it.

The astute minds make the most of every situation. So if you are waiting until everything gets better, because you just want to ride it out, but you actually have the resources & the capability (very important) to put your mind to something... And you decide to begin 3-4 months of product development, branding, websites, packaging, production, shipping & so on only when you look back and see it has well and truly passed... Well unfortunately, you may miss some of the most opportune times of a rapid expansion.

There will always be a negative spin to put on every situation, and an excuse to say no, to hold off, to "just wait", well we've heard it time and time again, and when you decide to start we'd honestly love to help, but it's so often that we talk to people 12 months after they first have a brilliant idea, only to have let it go again for some fear or doubt, that they finally pick things up and realise they are now even 18 months into their idea and are just starting to find their feet. Don't look back, make quick decisions and run with them! This is your life!

Wow... Just realised I'm ranting a bit there, please excuse that part, particularly for those who genuinely are impacted financially, in their health, through their families. For you all (and some of our dearest team members are in this category as well) we wholeheartedly pronounce that our thoughts and prayers are with you, and we all, as citizens of this earth, pledge to do everything that we can to help support you. To love thy neighbour. To support those small cafes, those restaurants, the events focussed businesses, those travel companies, those airlines, we all wish you a fruitful recovery and bounce-back to normality.

Heck with normality, become powerful again! We'll do our bit to help!

To conclude:

  • China is in full operation - don't be fooled
  • India is in lockdown until 25th March - Hold off on talking to factories there for now, you can however begin planning, drafting, designing etc.
  • The Australian dollar has had a pretty tough hit, but is on the climb as of Late March
  • eCommerce is really moving
  • There are opportunities everywhere
  • eCommerce businesses will be the least affected, very few overheads - low staff count
  • Although some horrific events have led to it, there will be 'significant' holes in the market now, for innovators to capitalise on
  • If you are wanting to wait until the dust settles, keep an eye on the rearview mirror, you might be left in an entirely new cloud of dust (green dust)
  • There are significant shortages of products and services due to the everyone being (justifiably) distracted, just keep your eyes open
  • Sourci is operating around the clock throughout this period, across 6 different countries and time-zones
  • For those who have seen their businesses diminish in a matter of days, our extend our deepest sympathies and we are here to help you rebuild your empires
  • Stay safe
  • Stay hungry (not literally, metaphorically.. You are aware that this has turned into a motivational article now)
  • Stay positive, and do what you can to help others

Sourci's teams are here to help, here to go through scenarios with you, to support where we can.

Reach out, and we look forward to talking to you in a matter of hours.

Sending out nothing but love & good vibes.


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