How do you compete with China? - Page 1
Forum section: electronics / general

author: jadew
author_rank: Frequent Contributor
timestamp: September 11, 2018, 11:40:11 pm
content: Hey guys,Whenever I think of a product, I always worry about chinese cloners, because, if your product is successful, eventually you'll have to compete with your own product, manufactured by someone who has no R&D to recover, no warranties to handle and no quality control to worry about.It's even worse when you try to enter a market where there are already such clones on the market (from other similar products).Has anyone identified a strategy that works against this, or is just the state of the matter and you have to either milk your customers really fast, or offer substandard products?

author: Mr. Scram
author_rank: Super Contributor
timestamp: September 11, 2018, 11:49:58 pm
content: Quote from: jadew on September 11, 2018, 11:40:11 pmIt sounds like you're trying to compete with Chinese cloners in areas they're best in. You'll never be able to compete on price without cutting your own throat. The trick is to provide things these cloners normally aren't that good at. A quick turnaround, an impeccable service level or quality or development of new products at a pace they can only follow allows you to provide a service that won't be easily matched.Don't wrestle the wrestler. Challenge him to a chess match to turn things in your favour. Providing you know how to play chess, of course.

author: schmitt trigger
author_rank: Super Contributor
timestamp: September 11, 2018, 11:54:58 pm
content: Quote from: Mr. Scram on September 11, 2018, 11:49:58 pmI like your philosophy. Smart thoughts indeed.

author: bitseeker
author_rank: Super Contributor
timestamp: September 12, 2018, 02:35:36 am
content: Your trepidation is understandable. It's never fun having your hard work pirated and China is a formidable foe. As Scram said, focus on what they don't provide. You've already pointed some of them out such as warranties, good and consistent QC, and a faster pace of innovation. Spark Fun had mentioned continuous product improvement and innovation as one of their strategies to differentiate themselves from the copycats.Assuming that your pricing is reasonable, potential customers who only buy the cheapest stuff and don't care about the value that your products possess probably wouldn't have become your customers anyway. So, don't worry about them. Do what you do well and the right customers for your product will buy them.

author: Tomorokoshi
author_rank: Super Contributor
timestamp: September 12, 2018, 04:30:06 am
content: Another option, which really isn't China-specific, is to work in an industry with a high barrier to entry. One way to have that is to make products that require certain approvals and certifications. These act as a sort of two-factor authentication. If the product is bogus, it either can't sell, or whoever buys it will have to deal with a non-certified potentially unsafe product.Certifications can easily take a year, which means there is a lot of cost just to get it approved. The liability of using such products could be recalls, failures, burned-down factories, etc.

author: jadew
author_rank: Frequent Contributor
timestamp: September 12, 2018, 05:08:45 am
content: Quote from: bitseeker on September 12, 2018, 02:35:36 amThis is what I assumed would turn the tie, but from what I'm observing, it doesn't. I'm afraid our compulsion to buy the cheapest thing possible is just too great, to the point that small and decent manufacturers can't exist anymore (they can, but working for peanuts).Maybe I'm mistaken, as I only have experience with two products so far, and there may have been something else wrong with my products that I didn't see, but it looks to me that most buyers (including technical ones) don't care about warranties or QC, instead, they are ready to take a chance on a direct-clone of a different product, because they know the original was fine.Quote from: blueskull on September 12, 2018, 04:13:51 amThat's going to be difficult for some products for which there is a need, they are simple to manufacture, but they involve a lot of R&D. I guess that in those cases the market will just have to do with poorly designed products, because nobody will want to take the risk.Quote from: blueskull on September 12, 2018, 04:13:51 amI think that's a good advice. I'll take it.Quote from: Tomorokoshi on September 12, 2018, 04:30:06 amThat's also a good idea, but it kinda rules out most small to very small companies that don't have the money and resources to play on that field. I suppose it's a good strategy to employ when you get in that league.

author: vk6zgo
author_rank: Super Contributor
timestamp: September 12, 2018, 05:09:57 am
content: Be India?

author: bitseeker
author_rank: Super Contributor
timestamp: September 12, 2018, 05:22:44 am
content: Quote from: jadew on September 12, 2018, 05:08:45 amAgain, these are not your customers — there is a mismatch between your product and your target market. Since not every product in the world is made with abysmal quality and sold for less than peanuts, there clearly are companies that make good products (even manufactured in China; it's not all garbage) and customers who want them.

author: xaxaxa
author_rank: Regular Contributor
timestamp: September 12, 2018, 06:58:25 am
content: In my experience the clone problem is overblown. If you are selling a product that is good value for the money, then cloners have much more other low-hanging fruit to target. Most victims of cloning are corporations selling overpriced generic products and the clones work just as well if not better (see: FTDI). Customers are not stupid and know the risks with off-brand crap, so if they chose to go for the clone anyway they have already weighed the risks against the benefits and decided the clone is better value.IMO the best way to "deal with" cloners is to always be one step ahead of them - by the time they have noticed your product and cloned it, you already have a better and cheaper one about to be released. Obviously you also have to stay competitive by being efficient and avoiding excessive financial overhead in your company. If selling something for $400 is cutting into your profits, whileclonerscompetitors are selling it for $200 and making a killing, then you know where the problems lie and what to fix first. As for R&D costs my opinion has always been that you should be forward-looking and see it as an investment rather than a cost to be recovered by milking customers. In other words, R&D costs should not be factored into product costs. There is a reason espressif is making a killing even though competitors have had the same product years earlier.TL;DR: be competitive, and clones will be the least of your worries.

author: b_force
author_rank: Super Contributor
timestamp: September 12, 2018, 09:40:43 am
content: If you work just as a freelancer/by yourself, I agree with skipping the R&D costs.Just see it as some extra pocket money or as marketing.Depending on your product a lot of times you're competing against big companies who just win in the numbers.I won't be to worried about copy cats.Just make your product a decent price.People are willing to pay a little more to avoid crap quality.Unless your product doesn't need that (like Arduino boards).

author: EEVblog
author_rank: Unknown
timestamp: September 12, 2018, 10:18:16 am
content: You compete by:1) being thegenuinename that has the quality assured original product. Let the community do the evangelising for your genuine product.2) Staying one step ahead of the cloners and sell direct to your existing customers and market.3) Having a support forum that's only for genuine products.4) Spread FUD about the quality of clones