Colors

Last year it was honeysuckle (some kind of pink I would say) and this year it is Tangerine (red-orangish…) colors that we are recommended to stay stylish in according to the market leader in color definitions Pantone.

The trend is to use soft pastel colors such as light wooden colors or green in combinations with stronger “neonic” colors such as “tangerine” (orange) or yellow (also coming back strong) with the softer pastel color as background and neons as accent coloring in for example stripes or floral patterns which are also trendy.

Materials
Trends in materials varies throughout different business, but a trend seem to be that that modern and cheaper materials such as plastic now makes way for more classic and natural materials such as stone, canvas, steel and wood.

Ethics
The material trend although not as easy to foresee as the color trend is in line with the phenomena to consume less and to purchase durability and quality rather than quantity and to live an environmentally correct, yet urban, lifestyle.

Products
When it comes to solid product forecasts it is not easy, we believe in the trend to buy less flashy gimmicky products and instead buy quality. Out goes USB-cup warmers, underwater clock radios with flashlight functionality and in comes long life products such as a genuine leather products like wallets, iPhone pouches and belts and long life (and assembly) do it yourself products as well as small and clever recycled/recyclable giveaways and premiums.

Products that integrate digital life into reality such as for example iPhone protective plastics that comes with a matching welcome screen background and products that use old recycled parts with developed patina with newly produced parts.

(not our production – but we like them)

2012 starts with the celebrations of the Year of the Dragon and ends with another Christmas and is packed with things in between, here are the highlights.

January – The Chinese new years starts early this year and most factories start to close 15/1. The new year is celebrated the 23/1. During this period the people travel back to there “home towns” that many times takes 20 hours to several days to get to by train and buss. Flight tickets are very expensive and are sold out since a long time.

February - Time to kick start the year of the dragon. The factories will open about 15/2 but some will open earlier and some later. The year of the dragon is the year for fortune and power according to the Chinese mythology so it will be a great year for everyone.

April – Trade show time in Hong Kong and China, good time to go to see what is new for the coming season and also feel the nice summer weather. In China, Guangzhou the 111:th Canton fair starts in middle of April. Phase 1 and 2 are up first.

May - Phase 3 kicks in for the 111:th Canton fair and fair also ends at the beginning of may.

June – It is Dragon boat festival time and also Swedish midsummer. Two very important holidays for our company.

August – The 112:th Canton fair starts at the end of this month.

September – The 112:th Canton fair ends in the beginning of the month. Mid Autumn festal, a few days holiday and a good time to reflect of how the year have been.

October – Mega Show in Hong kong is always a good place to visit to stay updated and maybe find some new suppliers and products for your market.

December – Christmas and 2013 here we come!

Thanks to low labor cost and to endless possibilities of customizing products a lot of the world’s production has today been centered to China and other Asian countries, but placing your production in a country far away comes with risks. While the lower production costs make sure your products stay competitive on the increasingly competitive market, risks concerning quality arise from lack of control and supervision when producing far away.

So how can you minimize your risk with production in Asia? There is not a single solution, but we will in this article describe the basics on how we do it ourselves.

I hope you will enjoy this information and that it can help your quality control to be smooth, in case you need further advice contact us and we will help!

Product idea

When you first get a product idea in your head and contact us we will try and see if it would be easy to produce by imagining the parts of the product and how they would be manufactured. A product with many and complicated parts is of course more likely to have more quality errors than a simple product with fewer parts. If we can we will use standard parts which does not only save money, but will also make sure that the part is already working since it is already utilized in other products found on the market.

Choosing factory

While choosing suppliers you have previously successfully worked with is often a good start for maintaining good quality it is not alone sufficient to do so.

Once we have your product idea we will start with looking at suitable factories for the production. The three best ways to evaluate a supplier is to check products that the factory has previously made and making sure that they really made it, often factories buy samples from other factories or stores and claim they produced it themselves, check where the factories current products are sold, in General Northern Europe or Japan is a quality sign while for example Middle East and even United States can be a sign of lower quality demands, lastly we will also advice to visit the factory before the order, even if all seem fine from far away you can never know for sure until you actually visit.

Note: when it comes to certification of factories in China such as ISO-9000 they are often fake or issued very loosely and we will not value them as high as we would when working with a western supplier.

Producing samples

We always produce 3 sets of samples in the factory prior to any production, these samples are then sent to our office in Hong Kong where they are evaluated and we make sure that they are all identical matches of each other. After the samples has been compared and evaluated one of the samples will be sent back to the factory (clearly marked) which can be used as a template for the production, one is kept by us for reference during our in factory quality control and one is sent for approval to our customer. This process makes sure that everyone knows what quality is approved and expected.

Sometimes the products need to be tested and sometimes this can be done during the sample phase (sometimes its the final production that needs to be tested). The testing of the product is decided by the client prior to the production and advised by us. Common test are CE, ROHS and EN71. While testing for some products such as batteries and wooden items often are mandatory some tests can be requested by the customer just to make sure the product fulfill their own quality expectations.

Documentation

Before we place an order with a factory we always sign a bilingual (English and Chinese) purchase order agreement clearly stating our responsibilities towards the factory and their responsibilities towards us. The purchase order is always accompanied by a product specification and a purchase order and they will together clearly state the quantity of the order the materials and quality of the product and packaging as-well as production time.

These documentations will serve as valuable support during the production and can also provide legal mandate in court whenever needed.

Production

We talk regular to the factory to see that the production schedule is followed. We also visit the factory to make sure key points are according to specification and deadline. This could be after the raw material comes in, after the molding or the printing.

We know that day to day contact with the factory is vital to make sure the production goes smoothly and you will get to know problems (trust me there is always problems) quickly and solve it directly and avoid surprises.

Before shipment inspection

A great product will fail if the logo is upside down, a screw is not in place or a part is inside out. It is very costly and time consuming to change a finished product so we make sure it is put together correctly from the beginning. We provide many types of quality control for our customers, but the most important from a quality perspective is always the pre-shipment inspection which is made just before the goods leave the factory. We insist to always do our quality control at the factory for multiple reasons, the most important is checking the products with your own eyes so you know what you get.

During our quality control we will control vital parts of the product and we will make sure that the the chosen AQL (Accepted quality level) is fulfilled. Normally we will do a 100% inspection of all of our orders, but if the production is really large and this is not possible we will instead use AQL according to the rules of ISO-testing.

Note on factory in house QC: the in factories in-house quality control normally remove some of the defective products, but it can never be trusted in full and we almost always find errors in the production, even after the in house QC.

 Payment and Transport

After the quality control is finished our quality report with pictures from the factory and production will be made and sent to our customers and the goods are shipped to our customers.

It is widely known that everyone in Sweden drink beer for breakfast, hunt polar bears in the backyard and enjoy eating chocolate and cheese inside our Alp cabins*… Well as a Swedish I know that this is not a good description for the majority of my Swedish countrymen, but when you arrive in China you will quickly realize that the Chinese people have just as many stereotypes of us western people as we do have of them. When talking to people in China you will quickly be told that “Westerners do this”, “African people are like that” and “Chinese people are like this” and these statements are frequently made in public with no embarrassment.

When starting to analyse this topic I realize that what I will analyse might be a bit sensitive and I would like to clarify that stereotypes are just simplified and standardized conceptions of a group of people and that they are likely far from true since not 2 people on this earth actually are the same no matter where they actually come from.

When people in the western world think of China there is probably a pretty clear image of certain characteristics, behaviours, outlook and style of the people living there, but we often forget that the differences between different groups of people in China are just as big as those between a Swedish, Greek and American so called “Western person”. For us it is easy to see how we are different from Americans, but for a man/woman from the Qinghai province in inner China (population density is lower than in Sweden) the differences will be small or most likely none.

So what are the most common stereotypes that the Chinese have of us Westerners? Well it is a long list which mostly is based on American, English, German and French westerners since they are the ones most frequently seen on TV and in advertising.

Top 5

1. Westerners are individualistic and materialistic while Chinese are more interested in the collective good

Comment: China is the second biggest market for luxury goods (after Japan) and you will see more Porsche cars on the streets here in Hong Kong during a day than during a lifetime in Sweden. How can owning a Gucci bag and a brand new Porsche be for the collective good and how can the income gap in China be much bigger than in Europe when people are less individualistic?

2. All westerners are rich!

Comment: Despite that the BNP in parts of China now is closing in on us in the western world a majority of the Chinese are still more poor than the average European, so this is partially true if compared.

3. All western people love alcohol and drink it almost every day

Comment: Well it might be true that many of us enjoy a drink or two, but not every day like many Chinese think. Truth is that the alcohol consumption in parts of China and also in South Korea is higher than that in for example Ireland which is famous (stereotype of course) for their beer drinking, perhaps too many Westerners have enjoyed the discount bar prices when visiting China to create this image? Other food stereotypes include that Western people eat at McDonald’s every day and that no westerners can eat spicy food (Mexicans are of Asian orgin?)…

4. All westerners speak English as their first language

Comment: Well not so much to comment on this, but it is a fact that most advertising of western products in China is made in a mix of Chinese and English and most movies shown on the cinema come from English speaking Hollywood.

5. All western people are pretty

Comment: Well it is flattering to believe so and if you look at movies and advertising it seems true, but who isn’t beautiful after some cosmetic surgery and some follow up work in Photoshop?.

* Sweden is often confused with Switzerland in China since the countries sound very much the same in Chinese and the Swiss has made a better job promoting themselves.

This year the best show for new and cool products was the Mega Show (in particular Part 1) taking place in Hong Kong. The Mega Show had the most items that any company in merchandising can ask for and in comparison with the Canton Fair in China there is a greater focus on quality and uniqueness. Another comparison between the shows is that many products at the Canton Fair are a little outdated (cassette tape player anyone?) and the products are often of a poorer quality.

When it comes to specialist shows, some were really poor, while others were really good. Our favorite of the specialist shows this autumn was The Electronic Asia show, which was held in Hong Kong in early October. This show was really good and presented a lot of interesting electrical items. The most disappointing show was the Sport Source Asia show (also in in Hong Kong). This was a really big disappointment since it had shrunk in size a lot in comparison to previous years – who knows if it will even return next year?

The best seminars during trade shows are never at big shows like the Canton fair or Mega show, but instead this year were found at the Electronics fair (“Product markings”), Eco Expo (“Recycling”) and Christmas and Seasonal Products (with their “How to Source from China” educational series). Why the big shows fail to deliver good seminars is strange, is it just because they know they will have enough visitors anyway?

The trend this year was a focus on environmentally friendly products, which, in the words of Gert Fylking (a famous Swede) “Äntligen!” (“Finally!”), have arrived. When it comes to product design, it seems like most products aim to look as if they were designed by Apple (not the fruit…), with inspired products appearing in almost every product category ranging from toaster ovens to tea cups.

A good thing at the shows is that now less and less well-known brands are on display in places they should not be. Whether this is a shift in producers’ attitudes, better abidance to intellectual property laws or just more hardline directives from the trade show management we’re unsure. Anyway it seems to be working and that is good, but we can still see a lot of Swedish company logos on display at the shows. Perhaps they are not well known enough to be removed, more strict control directly at the shows could be the solution in the future. So far we have never seen any of our products on display, since we sign strict contracts with our suppliers and they know we attend most shows, so they couldn’t easily hide it!

Overall, we were satisfied with what we saw this autumn at the shows, and we know that our extensive walking will benefit you all when placing your next orders.

In 1980 the city was declared one of China’s five “Special Economic Zone”, which gave it vital economic freedom making capital from the west stream to the city through Hong Kong and Taiwan. The effects of the newly established Special Economic Zone were extreme and the city grew from around 300,000 inhabitants in the late 70’s to over 7 million in the year 2,000. Today that number has doubled.

This extreme growth has made Shenzhen one of the richest cities in China, proof of which can be seen when looking out over the city’s skyline of over 200 skyscrapers. In 1996 the world’s tallest building was Shenzhen’s Shun Hing Square and the city will get another building on the top list when the new 646 meter high Finance center is completed.

The rapid growth of the city has pushed salaries up and made some of the bigger companies team up their factories in so called “factory cities”,one of the most famous of which is “Foxconn City” (sometimes refereed to as “iPod City”), run by Foxconn who employee more than 920,000 people in its factories producing products for Apple, Dell, HP, Nintendo, Sony Ericsson as well as other well known brands. In 2006, Foxconn was accused of mistreating its employees and in 2009-2010 14 employees committed suicide, resulting in employees having to sign a “legally binding” agreement not to commit suicide when working for the company.

Despite high crime and corruption rates, the future of Shenzhen looks bright and there has been long on going talks about merging the city with Hong Kong in 2030. Whether this step is taken or not remains to be seen, but certainly Shenzhen will remain an important player in the electronics industry for years to come.

Next time you browse the mobile phone store shelves and look at products with an Apple, Nokia or Sony Ericsson logo on it, remember that beyond the plastic case they are all actually probably made in the same factory in Shenzhen.

Meeting current suppliers

Since trade shows many times can be overwhelming it is important to focus on what is important to you. This means that you should visit the suppliers you work with or are interested in working with directly before starting to wander around aimlessly.

A normal mistake for trade visitors is to spend too little time with the suppliers you are actually working with. It is important to sometimes spend some time with your sales representative and also his/her manager since it will make a huge difference in the way the factory will later treat you and your company.

If you are meeting with your supplier to negotiate prices make sure you have received the quotation before you go to the show. If you meet your sales contact and you have a hard time negotiating the price a better way is to talk directly to the manager and tell good things about his product, your market and also how you plan to grow. Make sure to have some “bonding time” with the manager before you ask for any prices or price cuts. Trade shows provide a a great opportunity to solve the problems you and your supplier might have out from the office and over a hot cup of green tea.

Meeting new suppliers

If you are looking for new products new suppliers tend to be best since your current suppliers usually already shown you what they have to offer.

If you are looking for new suppliers you should download a map over the trade show before arriving and try and see where your suppliers of interest are located. This will maximize your time and hopefully give you a lot of new and interesting products to look at.

When you find new suppliers with interesting products a warnings is when the supplier have a very wide range of products in there booth, for example food, tools and wooden products it many times more than one factory that is renting the booth or even more likely an agent. If you ask for a product and the answer to any question is : “We can do it” it most certainly does not mean they know how or have ever done it before, but they think they can do it or they just want to have a sample from you to copy your design.

When you are meeting suppliers for the first time what you must remember that normally the exhibitor’s hire staff that speaks good English to answer your questions during the show. These staff are not in any way related to the company after the shows and talking to them is quite useless unless the interpret what their boss says. If a member of staff cant answer questions like “Where is your factory located?”, “How many workers do you have?” or similar questions they are not really working for the company.

Some general advice

Fair prices are normally not fair

In a trade show you normally don’t get the good prices since many agent or companies gather here all targeting new fresh and unaware western (primarily) customers. Some companies also offer really low prices at fairs to attract new customers who will provide them with samples of their products, then they can copy them.

Book flight tickets and hotel in advance

In China and Hong Kong many hotels will double or triple their prices before the shows, book at least 2 months early is always recommended and flight tickets might sell out.

Book trade show tickets online

Many times it is for free if you book it online on the trade shows homepages 1 week before the trade show.

Hiring a translator

A translator is many times needed in China. Never hire a translator outside the trade show since they normally will ask for commission on what you eventually buy or they already have made agreement to bring their client to his/hers partners booth. There is no need for translators in Hong Kong trade shows. Also avoid buying any of the products sold outside the trade shows, they are much cheaper in town (and probably better quality).

Transportation

In China the Taxis goes by the taxi meter, however during the trade shows some of them do not want to follow it to get some extra money and some taxi is not legal so there is not working. Only go with the taxi that follow the meter to be sure it is a legal taxi.

Attend seminaries

In most big trade show there is seminars held that gives you an edge of what is going on. They usually handles what the insiders in the industry say about the latest news, coming trends and legal advice. You can normally book a free admission online on the trade shows homepage one week in advance.

Give the fair time

It is needed.

Many people believe that once you have made an order from a factory in China and have a successful first delivery the coast is clear – that the first run of a product is always the most difficult and that once it has been completed, future production is easy – this is not true.

Unfortunately, you cannot keep ordering new batches and expect perfect results shipped to you every time.Many companies who decide to manufacture in China, tend to focus only on the first part of the process, the first batch. In the book Poorly Made in China (ISBN 13: 978-0470405581), written by Paul Midler, an American shampoo brand with a production base in China had continuously purchased large volumes of their best-selling shampoo from their Chinese supplier. A lot of effort had been put into the product development and packaging and the first deliveries of the shampoo went smoothly. One day, the American company started getting complaints about deliveries within which the shampoo bottles had broken or broke once squeezed. After studying the shampoo bottles, the American company founds out that since their first production run, the thickness of the bottle’s plastic walls had been shrinking, eventually removing their ability to support their own weight when shipped.

In recent times, there have been a number of famous scandals to do with lowering standards of production by Chinese companies, such as poisonous lead paint replacing the normal paint on children’s toys and tiny melamine plastic pellets being added to baby milk.

There are many explanations for this phenomena of fading quality, but the truth is that part of the problem is also caused by the customers. In China there are many factories and you can find more than a hundred producers for virtually anything. This huge competition sometimes shrinks producers’ marginal profits to almost nothing. Zero marginal profit might be acceptable for Chinese producers on a quick order as a means of attracting new customers, knowing that they can gradually replace or cut down on the product’s materials/quality without their customer (hopefully) ever noticing.

Quality fade prevention

When discussing the porblem of long-term quality reduction with my co-worker Astron Lee, our quality control and factory audit expert, he agrees that quality reduction is a reoccurring problem, but that it can be prevented. Astron proposes that a continuous quality control scheme must always be implanted for any product that involves regular or continuous production and that close supervision of the factory is necessary in order to maintain stable quality.

Yourlink2asia performs continuous quality control checks on all production runs we manage and we evaluate all suppliers for both short and long-term production using our factory audit reports.

Our factory audit reportsl evaluate such things as organisation, workflow, production and factory facilities, adherence to social and environmental standards, safety and hygiene, security and IP-protection and the in-house quality control systems. Using these audit reports, along with checking references (when possible), an assessment of the factory’s suitability for continuous production can be made.

Check list for product quality fade prevention:

• Don’t believe in “too good to be true” prices
• Check any references given
• Perform a rigorous factory audit
• Have a continuous quality control scheme for every production run.

End-note: Quality reduction is not a China-only problem, and is something you should be weary of, no matter where in the world you produce.

St: Paul's Cathedral built by Japanese catholic monks

Macau is a fascinating place with a special atmosphere which is felt as soon as you get off the boat. As a European living in Hong Kong, Macau is a nice getaway and it is less than a one hour boat trip away.

Macau is a city with two faces, on one hand it is a charming colonial village and on the other it is a gambling Mecca for Chinese people – a flashy Las Vegas-like city far from the Nevada dessert. For centuries the peninsula has been a place where East and West exist in harmony with catholic convents, Mediterranean style villas next to Taoist temples and Chinese shops.

After almost 450 years of Portuguese colonial power, on 20th December 1999, Macau lowered its last official Portuguese flag. For several hundred years the Western world used Macau for trading with the rest of Asia. Long before Hong Kong was founded, Macau was the strongest European trading base and it was also in Macau that the Europeans stayed the longest.

Evening view of the Macau Tower

In the 16th century, when the first Portuguese traders settled in Macau, the area was inhibited by fishermen from Fujian and farmers from Guangdong. For them, Macau was know as Ou Mun or “trading gate” because of its location at the mouth of the Pearl River just downstream from Guangzhou.

Today just like Hong Kong, Macau is a Special Administrative Region (SAR) of the Peoples Republic of China, meaning that Macau is allowed to maintain its own legal system, police force, monetary system, customs and immigration policy, whilst the PRC is responsible for the territory’s defense and foreign affairs. There are, however, big differences between Hong Kong and Macau. Hong Kong has a population of almost 7,000,000 people spread out over approximately 1,000 km² while Macau has a population of 520,000 people on a tiny 28,6 km² island, making it somewhat even more intense and compact than its “big brother” city.

Street in the small village Coloane on the south island

The gambling industry and tourism are very important for the Macau economy and almost 25,000,000 million visitors visit the country each and every year! One reason why gambling is a big market in Macau is because it is forbidden in both gambling crazy China and Hong Kong (with the exception of horse racing twice a week. While in Macau it is considered a vital part of the economy.

Between 1962 and 2002, the  country’s gambling industry has been operated under a government-issued monopoly license by one of Macau’s most prominent residents, Stanley Ho and his company Sociedade de Turismo e Diversoes de Macau. Since the end of the monopoly in 2002, several other casino companies from Las Vegas have entered the market with great success.

Besides the gamling, Macau is an offshore financial centre, tax haven and a free port with no foreign exchange control regimes. Macau is also well renowned for its textile industry which blossomed during the eighties and even though most of it has moved beyond the boarder to China, it is still the countries biggest export commodity.

I strongly recommend a visit to Macau, a city close to my heart. If you want to visit the city, it is most conveniently reached from Hong Kong, where ferries depart hourly.