I was recently conversing with a business owner who had watched the fall and fall of his wholesaling business as Chinese factories with web based shop fronts smashed his market share ….not an unfamiliar story, I have heard it all before.
When you look, you find an Achilles’ Heel in Chinese manufacturing, and over time, business owners come to find a salvation strategy in quality service and products. What they find, is a segment in the market, who value quality over cheap.
It is the challenge of each business owner to determine if the returns on servicing the quality market segment represent a viable business opportunity, one worth reinventing the business model for, or if should they call a stop loss, and pursue completely new business ventures.
Currently Chinese made goods suffer from the stigma that haunted the Japanese in the 1970s. The stigma of unreliable quality of good and services and an unacceptable level of lack of craftsmanship.
Retaining and training a highly skilled workforce that are capable of creating and delivering complex products and services, has been a challenge for Chinese manufacturing. We have seen the marketplace flooded with stuff of dubious quality. Like any glut, cheap stuff has overwhelmed us, spilling out of our homes into our hired monthly storage units. Stuff we are coming to realise, that is far from being an asset, is just clutter in our lives and lantana in our minds.
And so, we are not surprised to see a swing back to a marketplace where quality is revered, where things are built to last, and where we can admire produce that is based on natural assets and skills that take a long time to cultivate. Fine food based on excellent farming practices, the fresh air of a national park, craftsmanship, brilliant coffee roasting, the comfort of Spanish shoes and the reliability of office equipment made with quality management.
Quality is the simple promise of “we will do what we say we will do, every time”. In this time poor marketplace, people are increasingly looking for certainty of outcomes through quality products and services. There is a “less is more” ethos growing in consumers, where they want an uncluttered life enriched by quality, comfort and aesthetics.
Looking ahead we can wonder how long the quality gap will be there. Will China become the factory for the world for both quality and cheap goods? There is still a way to go, 25,000 of Chinese cars were recalled in Australia in 2012 for having asbestos in their gasket, recalled despite written assurance to the local distributor stating there was no asbestos in their parts. Once the lack of quality dents trust like that, it takes a long time for trust to resume with consumers.
No doubt many Chinese manufacturers will step up to be amongst the world’s best, but until that has been in place for many years, quality will be a competitive advantage for our local manufacturers. If there is a cost of pollution built into the cost of good and services, well that is when the playing field will tip even further to our advantage. If that time comes, every quality product and service will be a reflection of great human resource leadership and environmental excellence. We will be conscious of the real cost of goods and services, not just the asking price at the point of purchase.
Hearts and Minds
A Sydney based brand consultancy
Founder Thought Leaders Circle