Epic Guide · Sourcing Strategy
Let's cut through the geopolitical noise and talk practically. "China Plus One" has gone from a corporate buzzword to a genuine strategic imperative for thousands of UK businesses — and if you import physical products, it's worth understanding properly.
This guide explains what China Plus One actually means for UK SMEs, which countries are worth considering, and how to approach diversification without disrupting your existing supply chain.
China Plus One is a supply chain diversification approach where a business maintains its existing China manufacturing relationships whilst simultaneously developing at least one alternative sourcing country. The "Plus One" doesn't replace China — it hedges against the risks of single-country dependence.
The strategy gained widespread adoption after COVID-19 exposed the fragility of concentrated supply chains. The drivers have since multiplied: US-China trade tensions, rising Chinese labour costs, UKVFTA tariff advantages from Vietnam, and growing ESG pressure to demonstrate supply chain resilience.
According to the Santander Trade Barometer (Autumn 2025), 54% of UK businesses with China supply chain dependencies are actively diversifying or planning to do so. This is no longer a fringe strategy — it's mainstream.
Vietnam offers 0% import duty on many product categories vs standard UK Global Tariff rates from China. For clothing at 12% duty, that's a direct £12,000 saving per £100,000 of imports. This financial incentive alone is driving diversification.
Chinese factory wages have increased substantially. For labour-intensive products — garments, footwear, basic assembly — the cost advantage over Vietnam, Bangladesh, and India has narrowed significantly. China remains competitive for complex manufacturing, but less so for simple assembly.
Post-COVID, major retail buyers increasingly require suppliers to demonstrate supply chain resilience. If your products are 100% China-sourced and China faces another disruption, you have no fallback. A Plus One country provides it.
UK businesses supplying major retailers face growing ESG scrutiny. Xinjiang cotton restrictions, forced labour compliance requirements, and Modern Slavery Act reporting all create pressure to demonstrate diversified, auditable supply chains.
For most UK businesses, Vietnam is the default Plus One — combining manufacturing capability, cost competitiveness, UKVFTA tariff benefits, and on-the-ground infrastructure.
| Factor | Vietnam assessment |
|---|---|
| UK trade agreement | ✅ UKVFTA — 0% duty on most manufactured goods |
| Manufacturing capability | ✅ World-class for garments, footwear, furniture, electronics |
| Labour cost vs China | ✅ 30–50% lower for labour-intensive production |
| Political stability | ✅ Stable government; foreign investment welcomed |
| Sea freight to UK | ~30–35 days to Felixstowe (vs 25–30 from China) |
Vietnam is not right for everything. Complex manufacturing requiring sophisticated tooling (injection moulding, die casting, precision engineering) is still better done in China. Vietnam's strength is labour-intensive assembly and processing, not high-complexity manufacturing.
Best for: Textiles, leather goods, gems and jewellery, pharmaceuticals, engineering components.
The UK-India FTA was under negotiation as of 2026 — when concluded, this could create significant duty advantages. India has an enormous manufacturing base and strong English-language business culture. Challenges: complex regulatory environment, inconsistent infrastructure.
Best for: Garments and textiles — the world's second-largest garment exporter after China.
Bangladesh benefits from the UK's Developing Countries Trading Scheme (DCTS), meaning many exports face 0% UK import duty. Exceptionally competitive for basic to mid-tier clothing. Limitations: narrow manufacturing base, compliance scrutiny.
Best for: Furniture (especially rattan and wooden), textiles, footwear, consumer goods.
Indonesia has significant manufacturing capacity and competitive costs for furniture and homeware. The main challenge for UK buyers is less established sourcing infrastructure compared to Vietnam.
Start with a non-critical SKU
Don't pilot diversification with your highest-volume product. Choose a secondary SKU where you can absorb a learning curve without business risk.
Run parallel supplier development
Develop your Plus One supplier whilst maintaining your China relationship. Don't cancel China orders until you've proved the alternative delivers consistently.
Verify Rules of Origin compliance early
If pursuing UKVFTA benefits from Vietnam, confirm your chosen factory can genuinely provide qualifying Certificates of Origin before placing a production order.
Plan for longer lead times initially
New supplier relationships always take longer. Add 4–8 weeks buffer to your first order timeline from any Plus One supplier.
Aim for 70/30 or 60/40 split, not 50/50
Most UK businesses find a 70% China / 30% Plus One split optimal — enough to capture duty savings and build resilience, without the complexity of managing two equally weighted supply chains.
Epic Sourcing UK is one of the few UK-based agencies that can manage both sides of a China Plus One strategy. Our China team and Vietnam team operate under the same management and quality standards.
Supplier finding, verification, QC, sampling, and freight across Guangdong, Zhejiang, and other manufacturing regions.
Supplier finding, UKVFTA compliance verification, QC, sampling, and freight from Ho Chi Minh City, Hanoi, and Binh Duong.
Side-by-side landed cost analysis — product cost, freight, duty, and handling — for China vs Vietnam for your specific products.
We manage the transition from single-source to dual-source without disrupting your existing supply chain.
China Plus One is increasingly relevant for SMEs. The UKVFTA tariff savings are percentage-based — they apply equally to a £50,000 order as a £5,000,000 one. For UK businesses importing £50,000+ annually in high-duty categories like clothing or footwear, the financial case is compelling regardless of company size.
Allow 4–8 months from supplier identification to first delivery for most product categories. This includes supplier finding and verification (4–8 weeks), sampling and approval (4–12 weeks), first production run (6–10 weeks), and sea freight to UK (4–5 weeks). Epic Sourcing can accelerate this with existing Vietnam factory relationships.
Products requiring sophisticated Chinese manufacturing capabilities are generally best kept in China: electronics and PCBs, precision engineering components, injection-moulded plastics, complex metal fabrication, and any product where the Chinese supplier ecosystem is integral to quality and cost. China remains unmatched for these categories.
No — the UKVFTA covers most manufactured goods, but textile and clothing tariffs are being phased out over time rather than eliminated immediately. Check the current rate for your specific HS code on the UK Trade Tariff. Rules of Origin must also be met — goods must be genuinely manufactured in Vietnam.
Epic Sourcing UK manages both China and Vietnam sourcing for UK businesses. We'll assess your product categories and give you an honest view of whether China Plus One makes financial sense for your business.
71-75 Shelton Street, London WC2H 9JQ · hello@epicsourcing.co.uk · +44 7551 136406
