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October 13, 2015

Fighting the Stigma of "Made in China"


"Well, it was made in China, so of course it broke!" is a phrase I grew accustomed to hearing as a child. My mother would proclaim this sentiment, like clockwork, any time one of my toys crapped out after only a couple hours of play. Chinese-made products have gotten a bad rap for decades, as many consumers think they are cheap and of poor quality. While some items do fit this description (take counterfeit designer handbags, for instance), this accusation is far from accurate when it comes to higher-end consumer goods, particularly in the tech arena (here’s to you, iPhone). Major retail players like Coca-Cola, GE and Proctor & Gamble have been operating manufacturing facilities in China for years.

Below are a few arguments consumers make when it comes to discrediting items manufactured in China – arguments importers often find themselves up against when it comes time to market their Chinese-made products.

“Products made in China are bad quality.”

Consumers are sometimes quick to equate “Made in China” to low-quality, cheap products, but that is not always the case. Here's the thing: a manufacturer makes products to a buyer’s specifications. So rather than blaming China, we should often be blaming those buyers who are requesting the manufacture of cheap, low-quality products! A product will only be as good as its design. Apple slips under the radar a bit since the iPhone is designed in the US but made in China. But this is the case for millions of goods that will never earn the same accolades as the iPhone!

Importers can maintain high quality standards by following these key rules:

  • Don't settle on a supplier. Find a factory that matches your particular needs and specifications. If your focus is solely on getting the lowest cost, chances are you will end up with a low-quality item. Never sacrifice quality for cost savings. Continue your search until you connect with a supplier who can offer cost savings without compromising quality. 
  • Establish your expectations and specifications. Before you ever consider issuing a PO, get on the same page as your supplier regarding critical items in your BOM, capabilities your supplier must have, and compliane or safety standards that must be met. Educate the supplier on your product's application -- this is something that is often overlooked but is extremely important. If you fail to communicate your expectations, the supplier may default to the cheapest option available, which could compromise quality. 
  • Never skip product inspections. Inspections allow errors to be caught before goods leave the factory. Familiarize yourself with the factory's inspection procedure. It would be wise to have someone from your company present to oversee the first inspection. Another option is to hire an independent inspector to visit the factory and approve the goods on your behalf.
  • Conduct regular supplier audits. Don't assume a factory is following the rules just because the initial audit went well. Conduct regular walkthroughs to make sure everything meets your standards. Keeping them on their toes and showing your face regularly helps prevent production issues, poor working conditions, child labor, IP infringement, etc.

“I only buy products made in America.”buy-american-seal-big

A greater sense of patriotism and domestic support spurred by the Made in America movement has some Americans more opposed to "Made in China" than ever before. However, the economic recession of 2008 made it difficult for many consumers to continue supporting this movement as they found themselves in tight financial spots. According to a May 2015 Consumer Reports article, “Almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one, according to a recent Consumer Reports survey. And more than 60 percent say they’re even willing to pay 10 percent more for it.” I would be curious to see how often these intentions align with reality.

Chances are if a product is affordable and well made, the majority of consumers won’t place much emphasis on its country of origin. Most are concerned with scoring a deal, which China (and other Asian manufacturing hubs) can help deliver due to drastically lower labor wages than in the US, and thus, lower retail prices. Chinese labor wages have increased significantly in the past couple of years, causing some production to move to Vietnam, but wages remain far more competitive than in the US.

While both China and the United States have suffered manufacturing declines in 2015 YTD, the US faces a unique set of obstacles. A recent report sponsored by The Manufacturing Institute and Deloitte revealed that one challenge faced by the “Made in America” effort is the skills gap in US manufacturing. Per the report, “Over the next decade nearly 3 ½ million manufacturing jobs likely need to be filled. The skills gap is expected to result in 2 million of those jobs going unfilled.” Also, an October 2015 Bloomberg Business article showed that US manufacturing is flat-lining after a seemingly promising resurgence post-recession. Obstacles like these, in conjunction with low labor costs in Asia, have led to some iconic American products being manufactured offshore:

  • Apple iPhones
  • American flags
  • Radio Flyer wagons
  • Monopoly game pieces
  • Etch-a-Sketch
  • Converse All Star sneakers

“I only hear negative things about Chinese factories.”

Prepare yourself for an onslaught of clichés! Sensational stories sell....There are two sides to every story....Everything is relative. Of course, corruption rears its ugly head in every industry. There are Chinese factories (and factories all over the world) that exploit their workers and operate under a misleading guise of compliance. However, these are typically exceptions rather than industry-wide examples. Remember that negative stories are more often shared and sensationalized than positive ones. Do your own research before believing everything you hear and assuming a few bad eggs are representative of an entire industry.

“Chinese factories exploit children.”

Child labor issues have certainly arisen in Chinese factories, but the number of offenses has fallen in recent years as tighter regulations are enforced and importers of Chinese goods are increasingly insistent on maintaining ethical factory conditions. Relative to developing nations, child labor is not as common in China.

Preventing child labor issues takes us back to the importance of qualifying and regularly inspecting your Asian suppliers. If you are partnering with a contract manufacturer, ensure they are up-to-date on quarterly factory audits. Heck, ask to see the audit results. It's your right and obligation to verify that your product is being manufactured in an ethical way.

Key Takeaways

Don't cross China off your list of manufacturing opportunities because some assign it a negative reputation. Corruption exists everywhere, in every industry. Make smart decisions, do your due diligence, be alert, adamantly state your requirements and expectations, and penalize any suppliers who do not comply. Make necessary changes if major issues arise, and always focus on quality and ethics. You will be able to find success in China if you follow this advice!  


Filed Under: China