Manufacturers seek to raise US worth, profile
Frustrated by years of price competition and undeserved bad reputations, some Chinese companies are beginning to operate the way foreign brands do. After working for a couple of years for foreign brands, Chinese manufacturers know better than anyone else about the bonus of selling proprietary products.
"Take a $75 pair of Guess jeans, for example. The manufacturer gets maybe $5; transportation: $5; distribution: $25; the brand, $50," a Chinese jeans manufacturer said.
Even many fair-minded US customers know the value of manufacturing.
When asked which products in his house are "made in China", Phillip Gesue, a real estate manager in New York, replied: "Perhaps all of them."
But why do the Chinese fail to create their own brands?
"One of the reasons is there is a perception that China is providing low-quality products. If you are making inexpensive things, it's hard to make people think of you having high-end value," he said.
"The second reason is Chinese companies, which started 10 to 20 years ago, became manufacturers for foreign brands."
The problem with manufacturing for foreign brands is that China does not get the benefit of those brands' reputation, Gesue said.
But he believes that eventually China could move beyond this phase.
"The opportunity for China is to create the brands and produce quality products, and people will understand these are Chinese products and that they are of good quality. The same thing happened in the US with Japanese products 50 years ago."
Despite all the charges against products that are "made in China", Dong Yuejun, president of Ningbo Smal Electrics Co Ltd, chose to focus her attention on product quality for 20 years.
After being an original design manufacturer supplier for an international brand for eight years, she set up her US company in 2009 in New York and in 2011, began to sell heaters and air purifiers that were labeled with her own brand Smal, something she had dreamed of doing for years.
"In eight years (as an ODM supplier), we didn't have a single quality accident, and we always delivered on time. So we built a very good reputation among buyers," Dong said proudly.
Thomas Cappadona, a former CEO of a company that was one of Dong's clients, said he admired her standards, which he said is why he joined Dong's company after he retired from his original company.
"I've been with Dong for a long time. She has very high standards and very good quality in her Ningbo factory, and she delivers on time. For me, (working with her) is an opportunity that our competitors don't have," he said.
East meets West
Chang Liang, chairman of Aland, a Jiangsu-based nutritional supplement company, also said quality is his company's primary focus. Starting as a domestic bulk drug producer, his company in 2007 began its transition to a nutrient producer and sought to acquire a US company to tap the US market.
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