Importers’ new challenge during the economic crisis: securing their supply chain while maintaining low costs

The figures from the Quality Control industry in Asia account for a good indicator of the health of international trade. Based on a few selected indicators, AsiaInspection publishes this barometer on a quarterly basis.

With 8,500 Inspections performed during the 2nd Quarter of 2009 (+ 26% vs. Q2 2008) AsiaInspection (www.AsiaInspection.com) pinpointed some illuminating trends.

As consumers demand safer and more environmentally friendly products, AsiaInspection continued to see interest from companies keeping a close eye on every step of their supply chain, in order to prevent costly and embarrassing product recalls. After countless tainted product scandals coming from China and other Asian countries over the past two years, Factory Audits in Asia jumped +61% from the same quarter one year ago while Product Inspections were also stronger with +26% growth.

Companies around the globe are striving to improve their product, environmental, and social standards. As an example, Wal-Mart recently announced that by 2012, 95% of their production must come from factories that receive the highest environmental and social audit rankings.

China continues to be the world’s manufacturing floor

Sales of Inspections by client zone echo the daily news with the United States remaining the most affected by the crisis in terms of imports from Asia. Indeed, AsiaInspection’s turnover from US clients decreased by -4.8% between Q2 2008 and Q2 2009. In contrast, Europe was bullish with +29% growth, and emerging markets in Asia and South America saw brisk growth of +73%.

Based on the geographical split of Inspections performed by AsiaInspection, China continues to be the world’s manufacturing floor. AsiaInspection saw Product Inspections in China jump to nearly 7,000 for the quarter, a +25% increase compared to Q2 2008, this despite tens of thousands of factories shutting their doors since early 2008. However, other low-cost Asian countries outpaced China with a cumulative growth of +42% during the same period.

At a time when markets are contracting, this reflects the ongoing trend of companies securing their supply chain while maintaining low costs by producing in Asia.

Governments and consumers are making quality a priority. After millions of toy recalls throughout the world in 2007 and 2008, toy Inspections performed by AsiaInspection had an impressive year over year growth of +42%.

AsiaInspection will publish the Q3 barometer based on similar indicators next October.