If you’re younger than 40, you might have a hard time comprehending that it wasn’t very long ago when a “Made In Japan” label on an item was indicative of merchandise that was manufactured inexpensively. However, you might have noticed a trend throughout your life where these items have shifted from manufacturing in Asian countries like Hong Kong or Taiwan to countries such as China, Bangladesh and India.
Though dependent on a variety of macroeconomic and geopolitical factors, the evolution of low-cost sourcing/manufacturing countries is more or less the same: Over time, these countries develop a rising middle class, inflating the price of labor and overhead. While this growth in wealth chips away at the cost advantages of production, it simultaneously creates viable consumer markets. As countries move from “we make it” to “we buy it,” manufacturers search for new locations to manufacture while retailers tap the new consumer markets.