Sourcing is a supply chain between the supplier and buyers. It is the most basic and primary step. The essential aspects of sourcing and procurement are needed for businesses to grow. It is challenging to sustain in the global market. But with reliable sourcing companies that help find goods and service suppliers with required products, negotiate terms, inspect the products, and transport them to potential buyers, one can rest assured of their business growth.
To do business offshore is critical; different cultures, languages, and regional suppliers are the aspects to keep in mind. Hence, businesses opt for outsourcing to make this work hassle-free and money-efficient.
ET2C International, a British-owned company, is known to help their clients improve and develop their work globally where language, culture, and time differences are present. Since 2001, globalization has been growing, and the company’s focus is always on managing the source, making healthy relationships, quality control, and making a profit for clients.
Chief Operating Officer, Simon, ET2C International, who joined the company in 2007, spoke to us at length about the company, his journey, and vision in an interview.
Following are the highlights:
Please brief our audience about ET2C International, its USPs, and how they are currently positioned as a reliable firm in the sourcing market.
Simply put, we aim to make our clients’ lives easier. Managing suppliers overseas is much more complex than it seems, as one needs to bridge differences in culture, language, time, business practices, law, and regulatory environment. We, therefore, deliver solutions that drive visibility up the supply chain right to the factory floor.
Working across multiple sourcing markets (China, Vietnam, India, and Turkey), our teams on the ground are there to identify the right suppliers in the right markets for our clients. Our expertise and product knowledge across a broad range of categories allows us to deliver cost-effective product offers. Our quality teams ensure we have quality assurance and control capabilities on-site at the factory.
Whether a start-up, a wholesaler, or a retailer, we recognize that each client has their own needs. We, therefore, provide a range of sourcing solutions from ad hoc consultancy, sourcing and developing products, and quality assurance programs to establishing dedicated teams for our clients on the ground in Asia.
Ultimately, we allow our clients to maximize the benefits of sourcing overseas while reducing the risk.
Shed some light on your offerings and how they impact the industry and your clients?
We cover a broad range of services to meet our clients’ needs. These vary from sourcing products and managing production, and quality control to providing our client with a dedicated team. We also make sure our charging structure fits the clients’ objectives. For example, we can charge based on volume spend, savings generated, or even a fixed retainer.
Integrity and accountability are central to everything we do. We think this is important and it means that our clients can rely on us. In fact, most of our clients are with us for the long term (over five years), and this is a testament to our people and the service we provide.
Although many companies look to implement ‘direct to source’ strategies (i.e., factory direct), there is certainly still a need for agents within the sourcing arena. Too often, companies misjudge the environment in which they are buying from or operating, and that is where the complications begin. A sourcing company that understands this local market perspective already adds value. But when you overlay ethical requirements, product knowledge, commercials (terms and price), and scalable capability (i.e., quality, sourcing, logistic, and finance teams are part of our offer), the benefit is significant.
Share your opinion on how modern technologies have transformed the sourcing industry and what more could be expected in the near future?
It was ultimately Alibaba and the internet that opened up offshore manufacturing to the mass market. This transformed the sourcing industry and gave buyers the ability to source new suppliers for the first time. Barriers to entry were suddenly
Perhaps misleading (as it was not always direct to the supplier), but in an industry that is 80% communication, this was a giant step forward. Technology clearly has a role to play. Primarily to overcome language, culture, and distance.
There is now a range of technologies that are focused on data management and data flow. These can be in the form of sourcing software to facilitate oversight of supplier information and performance or tools (often SaaS) like radical supply chain mapping, heat maps and visualizations, QC tools, pricing analytics, carbon emission calculators, provenance mapping (via Blockchain), container loading programs and, I am sure, many others.
This evolution will continue driven by a shift in how consumers buy products. From a sustainability perspective, I would anticipate greater access to factories via technology and their brand purpose. Similarly, I think technological advances will be important within manufacturing to limit waste and be more sustainable for the environment. The shipping industry is looking at hydrogen fuel to remove any emissions.
It may be that you find yourself doing supplier visits on the Metaverse in the future – the more traditional supplier visits becoming a memory (but perhaps not quite yet!).
Considering the COVID-19 pandemic and its impact on global economies, what were the challenges faced by ET2C International’s doors, and how did you pivot from those challenges?
The pandemic certainly had an impact on ET2C, as with a vast number of companies across the world. Firstly, with a large China headcount, we had significant disruption when China effectively shut down in February/March 2020, due to the mass lockdowns.
It was significant as we were unable to ship goods to our clients. Thereafter, we, alongside our clients, have had to deal with multiple lockdowns in their respective markets, and given we have clients across the US, UK, Europe, Australia, New Zealand, Chile, Peru, and Mexico, we went through multiple disruptions over and over.
We did Pivot into PPE in April 2020, but we worked alongside our clients to find solutions that work for all parties (suppliers included). It really showed that having the ability to be flexible is paramount to building resilient supply chains.
Of course, the disruptions have not stopped there. The knock-on effects of the pandemic have led to the supply constraints with containers, which, mixed with high demand, have driven up freight rates significantly.
Shipping out of Asia suddenly becomes less cost-effective for certain product categories, and helping clients come up with a Plan B and C using our market reach outside of China has likewise been a key part of building resilient supply chains. We have always found creative solutions for our clients, but the past 22 months have certainly reinforced the need to be as agile as possible.
What would be your advice to budding entrepreneurs aspiring to venture into the sourcing market?
It is a particularly exciting time for entrepreneurs who want to venture into the sourcing market. There is a lot of change going on in the industry as well as broad adoption of technology. I think you have to be prepared to find yourself in new environments with different cultures and not be phased by this industry. I think increasingly there will be ‘new frontier’ markets that will take on more prominence in certain sectors (Ethiopia, for example).
Having the ability to operate effectively in these markets will be important. Be prepared to jump on a plane when required. Face-to-face discussions are integral to developing solid relationships.
In terms of advice, I would say treat your suppliers nice – a partnership that has a solid foundation will always be more beneficial over the medium to long term – and never assume anything. Make sure you do all your due diligence.
How do you envision scaling ET2C International’s operations and offerings in 2022 and beyond?
Companies will continue to broaden their exposure to new sourcing markets to build resilience in their supply chains. They will look to remove dependency on any market where it makes sense. Nearshoring will grow in importance where it is feasible. We aim to have a presence on the ground in these markets, so we will continue to expand our offer making sure we can deliver that visibility that we talk about.
Sustainability will be important, and we are currently working with a number of partners to expand our offering in this area. Whether it is around carbon emissions or the removal of plastic in packaging, we will continue evolving as a business to be able to deliver additional relevant solutions to our clients.
Lastly, we are already investing in technology, both internally as well as partnering with service providers to deliver digital solutions around sourcing, quality, and information flow.
Testimonials of ET2C International
For this UK industrial client, we delivered margin growth as well as a high standard of quality to enable them to grow their client base (even shipping directly to the client).
“The Function that ET2C provides in terms of the liaison between the suppliers and our finance, and processing orders, expediting shipping and supplier sourcing has been absolutely key to the success we have enjoyed so far”,
- Baker Perkins, UK.
About the Leader
Although Simon started his career at Ernst & Young (now EY) in London, in 2007 he moved to Hong Kong to join ET2C primarily to restructure the Group from a tax and finance perspective.
With the enjoyment of travel and meeting new people, Simon took on more purchasing and supplier management roles. After 15 years, he is now the Chief Operating Officer for the ET2C Group, primarily responsible for the merchant, quality, and logistics teams in our various offices. This includes making sure the company is set up to meet clients’ future expectations around visibility, data, sustainability, and market access.