This article talks about the lighting industry in particular but the exact same scheme can be applied to virtually any product you would buy in China. Only the and names of the shows and cities would change. I give you here my feeling and my experience as a European living in Asia, in Hong Kong more precisely.
Even today, China is the world’s factory. Even though many brands claim to be “Designed, Manufactured or Assembled” in their own country, much of the world’s lighting fixtures, accessories and electronics come from factories you’ve never heard of, located in two adjacent regions in China: Zhongshan & Zhuhai.
Located north of Macau, these regions are close to Shenzhen and Hong Kong, on the other side of the Pearl River Delta. At the heart of these two regions is the city of Guzhen, known as the “Lighting Capital of the World”. Guzhen is home to China’s largest lighting traders and wholesalers, the largest LED factories and the largest manufacturing lines in China. All factories and subcontractors involved in the production of lighting and accessories are here, collaborating with each other. Focusing only on production, they don’t care which brand they produce for, and it’s possible for two competing brands to have their products come out of the same factory. But who ultimately cares about these little Chinese manufacturing secrets if everything works and is delivered on time?
The marketing and communication war between brands is being fought in the Western world, in Western lighting, design and architecture magazines. Here in Zhongshan & Zhuhai, China produces. In the West, we are used to seeing the brand on the front of the factory: A factory = a brand, it’s cultural. In China, it is different and the way Chinese factories are operated can seem opaque to Westerners and it is not always easy to understand who owns them. The name of the factory has no relation to the brand(s) they produce for, and depending on the market and the customer’s face, the same factory can have different white labels and prices for the same product. Therefore, successful sourcing in China is a real job that requires a deep understanding of the local market and culture.
The weak point of Chinese factories is communication. Their websites are usually really bad, broken or non-existent and they display their products on Taobao and Alibaba (in short, the local eBay and Amazon). From a Western perspective, an industry that promotes its products on eBay or Amazon would be completely unprofessional and even suspicious. But these are the shortcuts they have found to avoid spending time on branding & marketing, which they don’t care about and for good reason: They are not in “Brand” mode but in “Factory” mode. Therefor, buyers will have to make some effort to understand the way things work. Using Taobao and Alibaba can also be a way to avoid having their websites blocked by the “Great Firewall of China” that filters the Internet and tools that Westerners use like Twitter, WhatsApp, Instagram, Facebook… Communicating with the Western world is a huge technical and cultural challenge for Chinese companies. Their communication looks “strange” from the West and it doesn’t help westerners to feel confident. Therefore, you have to spend time in China and understand how it works.
When talking about China, you have to change the scale. With 1.4 billion people, its internal needs are greater than those of Europe and North America combined. Don’t worry, they know how to produce fast, well and cheaply. Europe is full of small markets segmented by cultures, languages and borders. Therefore, a brand that is well known in Germany might be totally unknown in Italy. This situation allows hundreds of small brands to exist to satisfy the “small” local needs. And since it is not economically viable to own a factory in Europe just for one small brand, when a European manufacturer tells you “We have a factory in China“, it is very likely that they have found a “partner” factory that has agreed to manufacture their products in addition to many other brands and maybe its own competitors. Let’s put it this way: China is not about brands, but about white-label factories that produce for western brands.
As far as quality is concerned, China can produce the best and the worst. A lot of the factories are quite capable of the best if they have to. But they will always try to take shortcuts to increase their margin. You will have to spend time educating them and literally live in the factory, checking every step of the process and that’s why there are so many middleman companies in China to help you. Therefore, if you already have a good relationship with a manufacturer or factory, you can use them to source, you will save time and money. Don’t worry, even if they don’t like to admit it, like everyone else for that matter, your favorite Chinese factory doesn’t make all their products themselves. They also buy from that incredibly convenient supermarket that is China. In the West world, we are a bit ashamed to say that we use subcontractors, it’s almost shameful to say that we don’t do everything from scratch.
Visiting a trade fair in China can be an epiphanic experience. The Guangzhou International Lighting Exhibition is the show to visit at least once in your life. You will have the feeling of being in the matrix, close to the Chinese production lines. Moreover, Guangzhou is one hour drive from Zhongshan & Zhuhai, Shenzhen and Hong Kong. Visiting Guangzhou is not an easy task: China is an incredibly different world and it can be challenging to find people to speaks English. Think about preparing your visit and finding someone locally to help you. Nothing will ever go as you planned in China anyway, and that’s part of the fun experience too. You will also need a visa, which may be complicated to obtain. Hong Kong is easier for foreigners to access because visas are easier to obtain and most people speak English on the street. In Guangzhou and Hong Kong almost all exhibitors are Chinese and for good reason: No brands exists inside China but no name factories. And the Chinese shows are factory shows, not brand shows. With the same number of exhibitors on a third of the floor space, the Hong Kong show is a compact version of the one in Guangzhou. Companies showcase their technical skills and production capabilities, but not really their creativity. This is not where you talk to lighting designers and find creative inspiration, but rather at Light+Building in Frankfurt or Euroluce in Milan.
You will find in Guangzhou and Hong Kong all kinds of factories specialized in optics, LEDs, printed circuit boards, cast and profiled aluminum, drivers, power supplies, diffusers, control systems, electrical accessories, cables, connectors, testers, meters… You will find all the parts and companies that will help you to realize your projects. You will also find thousands of finished products ready to carry your brand and to be distributed in your country. These products are usually quite simple and cheap, but you are not immune to good surprises. A common trick is to come with your competitor’s product and find the factory that will copy it for 3 times less.
By the way: the same factory can have several stands in the same show selling the same products under different white brands at different prices. This is Chinese business, and it takes years of experience to make the difference. What you will find in Guangzhou but not in Hong Kong is all the production lines and machines to build your own lighting factory. If you need the machine that, to take the LEDs and solder them to a PCB and then do the quality control and wrap the whole thing, that’s at the Guangzhou show. You won’t find the 20 most internationally known LED and LED lighting brands here, or on very small booths, instead they exhibit at brand fairs like Light+Building in Frankfurt or Euroluce in Milan. Ditto for the super creative “Designed in Europe” brands you’re used to seeing in your favorite western lighting magazine. It would be like jumping into the lion’s den, they would be copied in the process.
All the buyers from around the world are here in China, secretly sourcing the products you’ll soon find branded in your favorite DIY stores. And when two buyers pass each other in the aisles of the show, it goes like this: “Hey, are you there? Yeah, I’m just looking… I didn’t find anything special… “