After deciding to start an e-commerce business in India, many factors are still to be considered. One of these concerns where and how to source the products you wish to sell.
The products you offer are central to your business – they dictate how clients view you and the value you provide. That’s why successful entrepreneurs invest time and effort in finding the right supply partners who can deliver dependable service.
Unearthing quality manufacturers is not always an easy job, though. You’ll have hundreds (or even thousands) to choose from, offering differing production terms and options.
No worries, though; we’re here to help. This article contains all you should know about identifying reliable manufacturers in India and how to locate them on Alibaba.com. Let’s begin with what a manufacturer does for you and how they compare to other product sourcing options.
Table of Contents
A manufacturer is any business that takes raw materials and turns them into finished or semi-finished goods. They may be in business for themselves or specialize in supporting other companies with their production process.
As a result, a manufacturer may sell its products to wholesalers, retailers, or consumers upon the conclusion of production. Or they may deliver goods to large companies and other manufacturers who intend to create more complex products.
Likewise, manufacturers may also provide outsourcing arrangements where they take charge of the whole production process on behalf of another company. Alibaba.com is home to manufacturers who provide all or a mix of these services, which is why the platform is a big draw for global e-commerce merchants.
You’ll often see manufacturers also referred to as suppliers, but don’t let this term confuse you. While it’s common to see wholesalers and retailers referred to by this name, manufacturers are also suppliers. They supply finished and semi-finished goods to others in the production chain, hence the name.
It’s worth noting that manufacturers are not your only product sourcing option. You may also explore the following options, depending on your budget and vision for your business.
If you intend to produce and sell your own goods, you’re better served considering one of the manufacturing options outlined above.
If you’re choosing to go with manufacturing, the next section will be important to understand the strength of India’s manufacturing sector and its unique advantages.
India has one of the fastest-growing economies globally and is expected to grow the fastest in 2022, according to the United Nations Conference on Trade and Development (UNCTAD).1 The country’s impressive economic profile is bolstered by its equally high-performing manufacturing sector.
As highlighted by the S&P Global India Manufacturing Purchasing Managers’ Index (PMI), which rose to 54.7 in April 2022, India’s manufacturing sector is experiencing solid performance.2 A PMI above 50 indicates business activity expansion and strong sector growth.
The most recent PMI also represents the latest in an uninterrupted chain of sector growth, barring a short contraction in March – the first in nine months. One reason for this strong growth is global brands’ increasing willingness to explore distributed supply chains. Likewise, India is emerging as a location of choice for export items like drugs and pharmaceuticals, chemicals, and consumer electronics.
With its reputation for low-cost production and affordable labor, India is staking a claim to becoming the world’s manufacturing hub. What follows is a highlight of manufacturing in India.
India’s solid manufacturing track record is catching the eye of global investors. Consequently, it’s unsurprising that the country is attracting serious international investment.
According to reports from the India Brand Equity Foundation (IBEF), India received $30 billion in foreign direct investments (FDI) in the first half of 2021 alone – a 15% increase over 2020 figures.3 In total, the country received FDI flows of over $80 billion in 2021, also a 10% increase over 2020 figures.3 The following are some of the standout foreign manufacturing projects ongoing in India:3
Other international brands like Optimus Electronics, and Bharti Enterprises also have extensive and ongoing investments within the Indian manufacturing sector.
These developments are significant for exporters, Indian companies, and foreign firms looking to source products from the Indian market. The influx of investment from well-known brands, coupled with the abundance of engineering and tech talent in the country, should assure these firms of the potential for quality suppliers in India.
Since its inception, the Make in India initiative has visibly boosted the Indian manufacturing sector. Targeted automotive, pharmaceuticals, and electronics investments are bearing fruit, with increased manufacturing activity and growth in those sectors.
For instance, the appliances and consumer electronics market is set to reach $21.18 billion in value by 2025, growing from a $10.93 billion valuation in 2019.3 Various other initiatives are afoot to stimulate growth in multiple manufacturing sub-sectors. These include:
Overall, it’s clear that India is making a concerted push to become an industrial economy with a globally-relevant manufacturing sector. Small business owners and large companies can benefit from the higher manufacturing standards this implies while enjoying the unique, low-cost advantages of Indian manufacturing.
With a clearer picture of the manufacturing sector in India, you know better what to expect as you research potential supply partners. Let us turn next to the process of finding dependable manufacturers on Alibaba.com.
Alibaba.com hosts thousands of Indian manufacturers. Most of them can supply you with their original goods or support your outsourced production process. You can also find others that produce original components that you can add to your process in creating more complex items.
Although Alibaba.com makes it easy to find and engage these suppliers with multiple product features and services that facilitate seamless trade, a thousand manufacturers is a lot to wade through. Follow these seven steps to ease the process and find the best manufacturers for your business.
At this first stage, your goal is to identify a shortlist of manufacturers that potentially meet your business needs. In creating your shortlist, you’ll need to consider many factors, such as whether the manufacturer owns a standard factory, available product categories, and the manufacturing standards they implement.
Start the process by executing a search on the Alibaba.com homepage. Go to the search bar at the top of the page and type in what you’re looking for. You’ll see a lineup of results that show various products meeting your search criteria. You’ll also see other information, including prices, minimum order quantity (MOQ), and the manufacturer’s name.
Go to the “Supplier Location” tab just beneath the search bar to refine your search results. Click on the drop-down menu and change the location from “All Countries & Regions” to “India.” The page will now present products from only Indian companies and online stores with a seller account on Alibaba.com. For instance, here’s a search for clothing manufacturers in India.
On occasion, Alibaba.com also has trade shows that showcase Indian-made items. You can take advantage of trade shows to access better terms and quality items from Indian manufacturers. These trade shows are always advertised prominently on the Alibaba.com homepage to ensure you never miss an opportunity for lower prices.
Next, you want to select a number of potential suppliers to connect with. Keeping this list manageable is a good idea; between 10-15 candidates is a great start for this stage. You can begin with this number, and if you need to drop certain candidates or replace them with other potential candidates, staying around this number keeps things organized and straightforward.
Before selecting manufacturer candidates, click on their product offering to read more about what they offer and applicable terms. The website will take you to a product description page where you can see all about the product.
To minimize your work here, a great step is to refine your search results by supplier instead of the default setting, which can present multiple products from one supplier. Doing this lets you get a broader spread of potential candidates.
Assess suppliers by reading through their company profiles. You can access the profile by clicking on the supplier’s name from the product description page or directly from the search results. The profile will tell you more about the company’s location, its track record, and how they make products. You’ll also see product reviews from the manufacturer’s customers and how they have performed in the past.
Carefully read the product description as well. Product descriptions contain vital information such as product specs, prices, shipping, payment, and other details. Just reading the product description can tell you if this is a supplier you want to work with. Then, if you have questions, reading through the product description will help refine your inquiry.
Making inquiries is an integral part of the B2B buying process, and the manufacturer also knows this. You’re likely to want several points clarified after reading through the product description.
Get started on receiving answers by connecting to the manufacturer. Do this by clicking on the “Contact Supplier” button on the search results. You can also click this button from the product description page.
Alibaba.com includes an intuitive chat interface that lets you rapidly connect with suppliers and seek clarifications. You can also find links to their website and email address on the contact page. Some of the questions you might ask include:
An early mark of a great supplier is their willingness to answer your questions and provide all the details you need. But it’s also vital to ensure you’re not asking for too much or seeking unnecessary information. So make sure your questions are relevant and straight to the point.
You should already have a good idea of what manufacturers meet your needs from your findings in the first three steps. Ideally, you know what candidates have everything you require and which ones can become better options with a bit of nudging.
Now, it’s time to whittle down your shortlist to the top five most promising candidates. As you make your selection, it’s a good idea to populate your final shortlist with candidates that have a strong pedigree. Some indicators that can help you determine this include checking if they have the following qualifications:
Identify sellers that meet your requirements and then move to the next stage, where you open negotiations with them.
The meat of the B2B process occurs predominantly during negotiations. As a B2B buyer, the seller expects that you have unique requirements that might need discussing. Or you may have other preferences that need you and the seller to come to a middle ground.
Remember that manufacturers are busy people, so don’t let negotiations extend for too long unless necessary to reach an agreement. Manufacturers often identify what terms are negotiable in the product description, giving you a point where to open negotiations.
Some of the terms you might negotiate include MOQ requirements, payment terms, and production requirements. You might need to share custom designs if you’re making a product from scratch. It’s necessary to discuss with the manufacturer to know what making the item will entail, cost considerations, and other factors.
Note: As with all preliminary business discussions, be careful when sharing proprietary designs or other intellectual property. Make it expressly clear that the designs are protected and specify concrete obligations on the seller’s part to protect that information. You can do this by producing a non-disclosure agreement (NDA) or another document that protects your rights.
The outcome of your negotiations will go a long way towards helping you decide on the final one or two suppliers you’ll prefer to transact with.
Before rounding up the process and placing a full order, you should obtain samples from the manufacturer. There are many reasons why this is a good idea. Here are three:
Most manufacturers provide samples as part of their process. Usually, you can get samples at a lower price than a regular order. But engage with the manufacturer to get their policy on sample orders.
Finally, you’re all set to place your order. The final order will include concluding negotiations on price, shipping terms, payment terms, and any other topics you want to finalize. You can place orders directly on Alibaba.com using various payment options such as online banking, wire transfer, and credit/debit cards.
You may be able to explore various payment terms with the manufacturer, such as a buy now pay later arrangement or part payment up front. Few manufacturers will require you to make a 100% upfront payment. It’s not advisable to agree to such terms either.
In any case, Alibaba.com provides an escrow service through Trade Assurance that protects your money. The funds only get released when you receive your order and are satisfied with your delivery.
Always remember that the goal of the B2B buying process is to connect you with suppliers that complement your business. The manufacturer also understands that they need to deliver ongoing value to ensure your business relationship is satisfactory and mutually beneficial. So, don’t hesitate to let them know if you have reservations, requests, or new ideas for other products.
With the steps we’ve shared here, you now have all you need to find quality manufacturers in India. And if you’re looking to extend your production or sourcing network beyond India, Alibaba.com is the perfect partner for your needs.
As the world’s largest B2B marketplace, Alibaba.com is home to millions of suppliers from dozens of countries worldwide. With a seller or buyer account on Alibaba.com, you get the tools to reach suppliers who can positively support your business and help you grow.
Are you looking to take advantage of the world’s largest B2B marketplace? Open a seller account to get started today.