The China-Plus-One strategy is no longer just for multinationals — Aussie SMEs are running dual-sourcing across China and Vietnam to reduce risk and secure supply capacity. Here's how it works in practice.
For years, I've watched smart Australian businesses play it safe. They build a tight relationship with one Chinese factory, lock in good pricing, and settle into a comfortable rhythm. And for a long time? That was the smart move.
In 2026, that same approach is quietly becoming a liability.
Global trade has shifted in ways that would've sounded dramatic just three years ago. US tariffs on Chinese goods have hit 100%+ in some categories. Industrial zones across Vietnam are running at 85–95% occupancy. And Australian importers are caught in the middle of a supply chain reshuffling that's happening whether they're ready for it or not.
The businesses thriving right now aren't the ones that abandoned China — they're the ones that added a second source. That's the China-Plus-One strategy, and it's not just for multinationals anymore. Aussie SMEs are running it too. Here's what it actually means, why it matters right now, and how to do it without blowing up your supply chain.
The concept is straightforward: instead of sourcing everything from one Chinese factory or one country, you maintain your China supply chain while building a second manufacturing base — typically in a Southeast Asian country like Vietnam, Indonesia, or India.
It's not about replacing China. China's manufacturing ecosystem is still unmatched in scale, speed, and cost efficiency for most product categories. If you're importing from China to Australia, you've almost certainly found that Chinese factories can hit price points and MOQs that nobody else can touch.
The "plus one" is insurance. It's a second lane that keeps your business moving if geopolitics, tariffs, port delays, or factory shutdowns cut off the first.
Think of it this way: you wouldn't run your entire business off a single supplier relationship onshore — so why would you offshore?
A few years ago, dual sourcing was something large corporates talked about in boardrooms. Today, it's a strategy Australian SMEs are actively implementing — and for good reason.
The US trade war with China sent shockwaves through global supply chains that Australian importers felt too — and still do. While Australia's relationship with China has stabilised considerably since the wine and barley disputes of earlier years, the global pressure on Chinese manufacturing has reshaped the landscape.
China–Australia Free Trade Agreement (ChAFTA) protections mean most goods imported from China to Australia are still tariff-friendly. But global pricing pressure is very real. When US buyers are scrambling for alternative suppliers, Vietnamese and Mexican factories book out fast — and Aussie businesses competing for the same factory capacity are left waiting.
Single-source supply chains aren't just expensive to fix when something goes wrong — they can be impossible to fix quickly. COVID-19 taught every importer this lesson. The businesses that bounced back fastest were the ones with multiple supplier relationships they could lean on.
In 2026, the instability hasn't gone away — it's just wearing different clothes. Whether it's shipping congestion, factory closures, or regulatory changes, having a second lane is no longer paranoia. It's just good business.
Vietnam is the go-to "plus one" for most Australian businesses right now, and the data backs it up. In 2025, Vietnam attracted over $36 billion in foreign direct investment, primarily in electronics, semiconductors, textiles, and footwear. Its young workforce, competitive labour costs, and favourable trade agreements make it genuinely compelling.
But here's the thing: industrial zone occupancy in major Vietnamese provinces hit 85–95% in 2025, according to Cushman & Wakefield Vietnam. The factories with capacity, the right certifications, and the ability to work with Australian MOQs are filling up. Businesses that start building Vietnam relationships now have a real advantage over those who wait another two years.
This is where most businesses get stuck. The idea sounds great — two suppliers, less risk — but the operational reality can be messy if you don't approach it right.
Here's how the best Aussie importers are running it:
China remains unbeatable for high-volume, competitively priced manufacturing. If you're ordering 5,000+ units of a well-developed product with a stable specification, your Chinese factory is probably still your best option for per-unit cost.
Keep your primary China supplier relationship strong. Don't pull volume from them out of principle — pull volume from them when it makes financial sense. Our supply chain management service helps businesses maintain these relationships without the admin overhead.
The smarter approach isn't to split existing orders — it's to route new product development or specific categories through your second-source country. If you're launching a new textile line, try Vietnam. If you're developing a new product from scratch, it might be the right time to test a Vietnamese manufacturer's capability.
This way, you're building the relationship and the supply lane without disrupting what's already working.
A $50K/year importer and a $2M/year importer have very different dual-sourcing needs. For smaller operators, the goal is usually to get one credible alternate supplier per product category — someone you've visited (or had inspected), done a test order with, and know you could scale with if needed.
For larger importers, supply chain management becomes a formal discipline — with freight contingency plans, dual quality control processes, and category-by-category risk assessments.
The single biggest mistake Aussie businesses make when trying to add a Vietnam or second-source supplier is doing it the same way they'd browse Alibaba. That works (sometimes) in China because you know the landscape. In a new country? You need boots on the ground.
Factories that look great on paper often have serious quality, compliance, or capacity issues that only show up when you visit. Our Vietnam sourcing service exists precisely for this — we vet factories so you don't discover problems with your first shipment.
I've seen too many Aussie businesses crash their dual-sourcing strategy before it gets off the ground. Here are the patterns worth avoiding:
Chasing the cheapest quote: A factory in Vietnam that quotes 20% below your Chinese supplier isn't automatically the right move. That gap can disappear fast once you factor in longer lead times, higher freight costs on smaller volumes, different quality standards, and the learning curve of a new relationship.
Moving too fast: Dual sourcing is a 6–18 month project, not a quick fix. Rushing factory selection, skipping sample review, or going straight to a large order before a test run is how businesses end up with containers of product they can't sell.
Not getting the paperwork right: Different countries have different documentation requirements for importing from China to Australia vs. Vietnam to Australia. DAFF biosecurity requirements, certificates of origin, and compliance documentation all need to be understood upfront — not sorted out when your goods are sitting at the port.
Treating it as "set and forget": A dual-source strategy only works if you actively manage both supplier relationships. A supplier you don't order from for 12 months will de-prioritise your account. Keep the relationship warm even when your primary supplier is handling the volume.
Building a China-Plus-One strategy is genuinely achievable for Australian SMEs — but it's significantly easier with an experienced team helping you navigate both markets.
At Epic Sourcing, we're not a one-country shop. We have teams in Sydney, China, and Vietnam. We run OutSource — our full-service sourcing solution where we find and manage factories on your behalf — across all three markets. That means we can build your China-Plus-One strategy as an integrated plan, not two separate sourcing projects happening in silos.
Whether you're a growing eCommerce brand that wants to reduce single-source risk, or an established importer looking to add Vietnam capacity for a specific category, we can map out what a dual-sourcing strategy looks like for your business specifically.
Smart Australian businesses in 2026 aren't choosing between China and Vietnam. They're running both — and building supply chains that don't fall over when one lane gets blocked.
The China-Plus-One strategy isn't a trend. It's a structural shift in how global manufacturing works, and it's here to stay. The businesses that start building their second lane now — while Vietnam still has capacity and the factory relationships are accessible — will have a significant advantage in 24 months.
Ready to map out your dual-sourcing strategy? Give us a bell and let's work out what it looks like for your products.
Never miss an update — subscribe to the Epic Sourcing blog for expert guides, industry insights, and sourcing strategies built for Australian businesses.
