China’s cost advantage in manufacturing is eroding fast as many American and Chinese consumers say they want Made in USA products and are willing to pay more for them. In contrast, European consumers prefer goods from their own home countries.
That’s according to a survey conducted by the Boston Consulting Group. The BCG study was conducted online from Sept. 10 through Sept. 17, surveying 1,001 respondents in the U.S.; 1,000 in China; 1,505 in Germany, and 1,502 in France. The respondents were between ages 18 to 70 and evenly split in terms of gender. Annual household income ranged from $25,000 to more than $100,000.
The study also concluded that there’s a significant opportunity for manufacturers and retailers to capture that pricing premium. Manufacturers, though, will need to rethink their footprint to emphasis U.S.-based production, while retailers will need to concentrate on sourcing strategies with an eye toward quality and price advantages. Both will need to better communicate the American-made focus to consumers.
Based on the replies, 80 percent of U.S. consumers prefer Made in USA versus Made in China. They are also willing to pay more for Made in USA goods, with more than 20 percent stating they didn’t mind paying a premium that was more than 10 percent. That willingness was similar across age groups, incomes and family status.
For apparel and footwear, 45 percent said they were willing to pay up to a 10 percent premium for an American-made item, with 21 percent stating a willingness to pay a higher percentage. Also, when the survey was conducted, 57 percent said they chose an American-made product over a Chinese-made product at least once in the month before, even though the Made in USA product was more expensive.
Patriotism and related factors were the primary reasons for the willingness of Americans to pay more: 93 percent said they want to keep jobs in the U.S.; 81 percent felt better about buying American-made, and 80 percent cited patriotism as the goal. Quality, at 85 percent, was the secondary reason for buying American made, while durability, at 65 percent, was a related factor in their decision.
Among Chinese consumers, 19 percent preferred Made in China, while 35 percent had no preference. The overwhelming majority, at 47 percent, said they prefer Made in USA goods. At 61 percent, the majority said they were willing to pay more for an American-made product. For apparel and footwear items, 35 percent stated they would pay up to 10 percent more and 16 percent said paying more than 10 percent was OK.
Quality, at 82 percent, was cited by Chinese respondents as the primary reason for buying Made in USA, with durability, at 68 percent, coming in second.
Among the Europeans surveyed, German and French consumers, each at 65 percent, said they were willing to pay more for products made in their home country versus American manufactured items, and they cited patriotism as the key reason.
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