The rise of the non-traditional competition

Over lunch with senior manager for performance improvement in PricewaterhouseCoopers Andreas Wettstein was when I first caught a glimpse of what transportation in China looked like 10 years ago.

Imagine this: you’re a supply chain manager and on a rainy weekend, you receive a call saying your shipment of sugar has arrived – in an open container.

Horrified? I sure was.

But that was 10 years ago. China has since transformed their logistics sector to one that now causes their European competition to shake in their shoes.

“The average Chinese competitor of 10 years ago and one of today is very different,” says Wettstein. “Non-traditional companies are now big competition to European companies.”

Clearly, the competitive landscape is changing. Armed with cheap labour and raw materials, local Chinese competition is slowly but surely matching their might to the big boys.

How to gain a competitive edge? Get your supply chain right, Wettstein said.

International MNCs can now ill afford to view local Chinese competition as anything but significant, he said. Asia as a collective is now both a source and a market, so “the importance of getting your supply chain right cannot be compromised.”

And not just in terms of getting the goods to the end consumer on time, but also the method in which goods and raw materials are transported will be increasingly important in the years to come, especially when end consumers are beginning to pledge their loyalty (and money) to companies with greener, more ethical supply chains.

Which means no child labour, no slavery and no raw materials subjected to the elements during transportation.

Personally I think the Chinese government is more than ready to set those wheels in motion. Once they do, local Chinese businesses, or what was previously termed non-traditional competition, will move out of the non-traditional realm and evolve into formidable players in the global business platform.