Working in China I have noticed a few things about business in China
It’s pretty easy to start a business in China and I think that there are many businesses started by people that really don’t know how to run a business.
Also, a lot of business in China is based on relationships. For instance. Person B knows person C who makes widgets. Person B knows Person A who knows someone who wants to Buy widgets. Voila Person B and Person A start a business to sell the Widgets. None of them really know anything about running a business.
I have tried to buy products from reputable companies and I have asked for quotes and specs, etc…I find the sales people have almost no knowledge about what they are selling. The quote that you get may just be a simple email or even text message with a price. No description of what the price is for. No terms. No specs. This is from high tech companies that are fairly large.
Next, Chinese companies want orders for big quantities. If you are not ordering big quantities you will either get no response or if they do business with you then you are not a priority.
Then there is language. This barrier to doing business is understandable and can be solved with good documentation.
The last item on my list is that Chinese are always looking to make more money. So if they can save .5 rmb by cutting the quality a bit, chances are really good that they will do it. I think the mentality is different from the West. Westerners think saving 10 cents on the production of my product is not worth the aggravation of getting a complaint or a returned product. It seems that a Chinese business man is perfectly willing to put up with this aggravation to make more money. It’s just a different way of looking at things.
I don’t mean any of the above to be critical or to be negative. It is just my observation after being here and doing business here for the last 5+ years. It’s funny that even Chinese don’t trust other Chinese companies to provide quality goods over the long term. That is not to say that there are not quality supplier in China, there certainly are, but there are so many businesses here that you have to really sift through a lot of companies to find the good ones.