The End Of Cheap China

Author James Mash 11.8.2015. | 14:12

There is no end of articles on the web extolling the virtues of buying electronics from China or condemning everything with a made in China label on it as, “Cheap trash”, but these extreme views can be misleading and are nothing more than outdated hyperbole used by sales teams or overexcited protectionists trying to avoid competition with the growing Chinese brands. With ‘cheap’ we are referring to cheap quality, as the prices are still as competitive as ever.

 

Apple Products Are Made In China

Most of the negative articles are by those who haven’t even visited China, did you know China makes products for the world’s leading brands like Apple, that’s right, 100% of Apple’s manufacturing is outsourced overseas to China. Take a closer look at that label and you will probably see “Designed by Apple in California, assembles in China”. But wages are rising in China right? So what! Check the cost distribution of making an iPad below:

As you can see, in 2010 the iPad costs 499 USD of which labor cost in China was only 8 USD. Today it might be 10 USD. Percentage wise it’s a big increase of 25%, but looking at the total cost picture, it’s very insignificant.

..historically that “Made in China” mark was synonymous with the highest levels of workmanship and attention to detail.

In fact historically that “Made in China” mark was synonymous with the highest levels of workmanship and attention to detail. Western merchants couldn’t sail fast enough to the Far East to bring back rare high quality items such as porcelain, silk and artworks. It’s only in the latter half of the 20th century that this label of excellence has become tarnished by mass production in which profits came first and materials and craftsmanship may have suffered.

However with the rise of the Chinese dragon and increased global competition, Chinese business leaders and tech savvy manufacturers are paying more focus on brand name generation as well as developing their own high end products.
Look at the likes of Lenovo and Huawei who are among the front runners in communications and technology. There are plenty of high quality products in China, and thanks to lower employee wages, proximity of components as well as cheaper energy prices Chinese manufacturers are still able to offer competitive prices for many electronic goods.

On top of that, the Chinese are now also end users. 10 years ago, non of the smartphone factory’s workers owned a smartphone themselves, today it’s hard to find a smartphone assembly worker that doesn’t own one. This definitely is beneficial to the quality outcome.

 

Designed & Developed In China

China has been slowly emerging from a country that purely assembles other countries brands to one that makes and develops their own. This makes economic sense if China wishes to sustain its growth and build its manufacturing sector. As an example, for every iPhone that’s sold by Apple, China ends up with very little money with the vast majority going to the brand company. By developing their own products or brands China gets to keep the wealth as well as offering products at lower prices to a growing domestic and international market that recognize value for money and help put money back into the development of the market.

China still remains a prime location for sourcing high end electronics

Development of own products definitely creates opportunities for entrepreneurs all over the world. First of all, they don’t face the risk of being accused of selling counterfeit products. In addition, there is a possibility to apply their own brand on products as if it’s their own. Some factories even have created their own brand. THL, Ulefone, VKWorld and Nexodus are all brands owned by smartphone factories. While Chinese firms may be behind the west with brand development all indicators show they are catching up fast and China now has the second biggest advertisement spending in total and is gaining on the US who spend the most.

So what does this mean if you’re looking to China as a source for cheap electronics and high profits? Well China still remains a prime location for sourcing high end electronics and while China has its fair share of counterfeit goods there are plenty of ways to protect you and your company from receiving sub standard or even dangerous items.
Quality Control Approved Stamp Shows Excellent Product

Chinavasion: Our Added Value

There is plenty of good news however as Chinese brands are also keenly aware of counterfeiting and are introducing ever more sophisticated supply chain tracking to overcome this. By working with reputable companies such as Chinavasion and establishing a good relationship with supply chain partners you can help remove these rogue traders from the market and be assured that the products you buy form China are authentic and of top quality.

There are many developing brands in China and searching out the best can be a time consuming task that involves talking to manufacturers, visiting dozens of factories and negotiating. This is where Chinavasion can inject their expertise, with over 12 years experience in sourcing from China we are in a position to search out some of the best products and upcoming brands while securing a good price that enables resellers to make a handsome profit and be assured of quality products.

Author James Mash 11.8.2015. | 14:12
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1 Comment

  1. Daniel August 13, 19:00

    Gradually we’ll probably see a shift here in the next few years as also China’s direct investments in oversea enterprises will start to show results… “made by China” will then be coming our way.

    Thank you for your great work!

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