From Copy-Cat Central to Center of Innovation
Seeing Made in China on a product label hasn’t always filled people with confidence that the product is going to be a sound investment. These three little words tend to have negative connotations which include overworked staff, inferior quality, safety issues, copies of designer goods and the decline of manufacturing industries in other countries. However, it doesn’t seem to stop consumers worldwide from purchasing goods adorned with this label.
Despite the widespread negative associations, we can’t resist an attractive price-tag. Whether it’s clothing, furnishings, electronics, white goods or even cars, consumers continue to be drawn in by inexpensive items and a wide variety of choice. Britain imported £35.6 billion in Chinese goods and services in 2016, making it the UK’s third largest import partner. Times are changing and the traditional perceptions of the Made in China label are no longer true. The nation’s factories do a lot more than just create the goods. They also design, source, manufacture and deliver entire product lines – faster than most competitors. Now is the time to myth bust the stereotypes and redefine what Made in China really means.
Copycats and Counterfeits
From fake designer handbags, to tablets, it is popular opinion that Chinese factories copy absolutely everything. When new innovations appear, it is only a matter of time before imitations trickle into the market having been quickly replicated and reverse engineered in China. Generally, western consumers envisage Chinese factories to be speedy, dedicated production lines, void of innovation and without their own in-house design teams.
Research and development has become a priority, and investment in the area is predicted to surpass the US sometime in the 2020s. Historically, factories in China would make products from a dictated design, but this has been flipped on its head in recent years. The country is now a global leader in the number of annual engineering graduates. This influx of home-grown knowledge and expertise has led to a significant shift, enabling factories to invest in innovation, taking their own products to market and testing their commercial viability.
In almost 20 years of working with Chinese factories, recently I have seen a real shift in creativity with suppliers beginning to pro-actively send through new ideas and concepts from their own design teams. This doesn’t mean that copies don’t still exist, but the scales are certainly tipping towards a flow of original ideas and a fresh perspective to maintain continued growth of the export market and feed a growing demand internally in China.
Historically, products Made in China have been considered to be of inferior quality due to cheap materials, low cost, poorly skilled labor and rapid production. When the consumer sees Made in China they are more likely to associate this with lower quality and, as such, expect to pay a lower price for the item.
China is not the cheapest sourcing region for many products anymore, especially compared to countries like Cambodia, Vietnam and Bangladesh. However, because the costs of production and materials are still notoriously lower than other parts of the world, Chinese factories are still able to supply the lower end of the market, as well as luxury sectors and everything in between.
Many high-end brands manufacture in China because some of the world’s most state-of-the-art factories are located there and even small and medium-sized enterprises (SMEs) are used to the compliance and quality demands of Western businesses. For these brands, quality is central to their brand’s integrity yet they still make the decision to manufacture in China. As a result, consumers are able to acquire higher quality products for a lower price due to the excellent technical expertise of Chinese suppliers.
In China, the infrastructure is sophisticated, meaning that moving goods within China and internationally is easy. Standards of quality have infinitely improved and the ‘cheap and cheerful’ reputation is becoming less prominent, as the country enjoys a boom of factories producing luxury goods.
Poor Environmental Conditions and Health and Safety Standards
Health and safety issues and stories of pollution and human rights abuses are commonplace in factories in China. These truly awful situations have no doubt helped increase consumer awareness of the changes that need to be made to protect workers, but can also leave people feeling that working conditions in all factories in the Far East are the same.
Health and safety, anti-pollution and human rights of workers is now a big area of focus in China. Local governments are more involved than ever, aiming to implement standards and monitor factories so principles are met. For example, there is a current clampdown on production hours of high polluting factories in 31 provinces across China to help meet anti-pollution targets by the end of 2017 and the Guangdong regulations on Collective Consultation in 2015 have helped to outline rights for both workers and employers so contract negotiations can now take place in good faith.
Companies that partner with factories help take on some of the responsibility too by putting stringent compliance programs in place to audit factories and ensuring that certain health and safety criteria are adhered to. All this has led to a greater emphasis on improved working conditions and well being. Our experience has taught us that using social media, conducting surveys of workers to better understand their concerns, and carrying out training on linked issues such as worker-management communication and improved productivity and efficiency measures is a good way to support factories as they continue on their journey of improvement. The more streamlined and advanced the evaluation techniques become, the better the working conditions, ultimately leading to fewer incidents. There is always more work to be done in this area, but overall there has been a big step forward.
As long as consumer demand continues to grow at its current rate, we will need to continue manufacturing in China. Awareness is crucial. Knowing how the products that consumers need are made, the more educated the purchasing decisions become. Instead of trying to combat the fact that Made in China is an on-going trend, we must focus our attention on ensuring that quality standards remain high and workers are protected. By having more awareness and acting responsibly, whether as a brand, supplier or consumer, we can all work together to play a vital role in dispelling the perceptions of Made in China.
Steve Wickham is head of CSR at Matrix.