by Carmel Giblin, President & CEO, Ethical Supply Chain Program
Emerging markets, such as those in Southeast Asia, Africa, and parts of Latin America, are becoming central to the consumer goods industry. Countries like Vietnam, Indonesia, Ethiopia, and Guatemala are gaining prominence due to their cost-effective labor, government incentives for foreign investment, and manufacturing capabilities. Additionally, these regions are home to a growing pool of skilled workers and suppliers capable of meeting international business standards.
A solid supplier relationship is key to successful sourcing. Trust and collaboration with suppliers lead to better communication, improved product quality, and timely delivery — all essential in today’s fast-paced consumer goods market.
However, operating in these markets can challenge businesses seeking to diversify their operations. Regulatory complexities, cultural differences, and oversight challenges can ensue for those impacted by distance and a lack of local expertise. Businesses must, therefore, prioritize building trust and transparency with suppliers to ensure stability and compliance with standards.
A solid supplier relationship is key to successful sourcing. Trust and collaboration with suppliers lead to better communication, improved product quality, and timely delivery — all essential in today’s fast-paced consumer goods market. Additionally, long-term partnerships encourage suppliers to invest in capacity building and innovation, which benefits all parties.
Building these relationships requires regular engagement and clear expectation setting. Companies must invest in supplier training, share performance metrics, and establish joint accountability for meeting goals. Working with a third-party organization, such as the Ethical Supply Chain Program (ESCP), is both a time-saving and cost-efficient way for businesses to source new suppliers who have benefitted from capacity-building support, are committed to transparency and data sharing, and meet the standards required by global buyers.
Third-party organizations can help navigate the complexities of sourcing in emerging markets, which can be daunting for businesses without a dedicated team or technological infrastructure.
3 IMPORTANT STEPS:
Businesses seeking to spread risk or gain competitive advantage should follow these three steps to maximize the available opportunities:
- Identify emerging market(s) that meet your business needs; evaluate production costs, shipping costs, import tariffs, labor availability and capability, and legal obligations.
- Work with a third-party organization to identify trusted suppliers in these markets. Several third-party organizations, such as ESCP, offer supplier audits and certification, oversight assessments, and tools to help businesses with decision-making.
- Implement a risk monitoring system to ensure long-term success. Consider market volatility, geopolitical instability, environmental issues, and ethical violations.
To learn more about sourcing opportunities globally, contact membership@ethicalsupplychain.org to book a call with our team. Discover the latest in news, webinars, and thought leadership at ethicalsupplychain.org.
A version of this feature was originally published in the 2025 edition of The BIG Toy Book. Click here to read the full issue! Want to receive The Toy Book in print? Click here for subscription options!
The post Sourcing in Emerging Markets: How to Leverage the Opportunities appeared first on The Toy Book.
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