International Sourcing is the Backbone of International Retailing

In the current times International Retailing industry is largely characterised by international sourcing. Though one might argue that for centuries countries have been engaged in sourcing materials from different countries, international sourcing as in the retail trade has grown and changed over a period of time.

In the initial stages, the impetus for retailing of branded products was provided due to the brands having established themselves with the customers as providers of quality products as well as designs. Once the customers began to identify particular brand with a particular type of design as well as quality product, the perception stuck and fuelled demand for the particular brand. Thus the brands began to be stocked by the whole sellers who in turn supplied to retailers. The brands used to rely upon the local in house manufacturing plants or from domestic suppliers who would be contracted to supply as per the brand design. Gradually with increase in cost of manufacturing, the brand managers had to evaluate alternate options to keep the costs down. Subsequently they began to look at importing the raw materials from the overseas suppliers and get them manufactured locally. When this option was not feasible, companies began to look at various international markets for sourcing their made to order products.

If one reviews the global sourcing plan of some of the biggest buyers mainly from Europe and US, we find that they procure different items from different countries. Some of the countries specialize in some of the raw materials which may not be available in other countries. Items like Cotton, silk, ethnic fashion jewellery; embellishments etc are normally sourced from India, Hong Kong and other Asian markets. Similarly fashion jewellery in bulk is available in China. Some countries like Mexico, S.America and China have set up huge manufacturing capacities for Exports. In such cases the raw materials from other countries are shipped out to these factories who assemble| manufacture and export to the final destination like Europe or US. In some of the cases, the products are imported into the country in parts and assembled at the final destination with the label showing as manufactured |assembled in the destination| home country. Therefore sourcing is mainly dependent upon the markets where raw materials are available and the country where cheap labour and low cost manufacturing facilities are available.

Today international sourcing strategy and operations hold the key to the success to international retail businesses. First and foremost the international retailers have got to have the right procurement strategy and procurement policies. Existence of a reliable network of suppliers that can supply the products in time and with desired quality standards is the next important step that defines the success. As the right products have to reach the markets within the time frame in each season, a strong supply chain model that is capable of managing seamless end to end supply becomes the key differentiating factor for the business. Thanks to technology, supply chain can today be managed efficiently at global levels.

With the growth of international markets, sourcing too has grown over a period of time. In current times most international buyers have established global procurement offices, agents across the globe that manage key suppliers to ensure they are able to gain control over the buying process as well as supply chain process. This model has developed over a period of time.


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