If you travel by ferry from Shenzhen to Hong Kong, in one of the industrious workshop region in China, an enormous billboard greets you: ‘’Time is Money, Efficiency is Life.’’ China is the world’s largest manufacturing power. China’s production output surpassed America’s in 2010. China accounts for fifth of the global manufacturing.
An estimated 60 per cent of Uganda’s imports come from China. The products are characterized by low quality and cheaply priced. They are basically products for everyone- including the low end market. But how did Chinese come to dominate the market?
In the early 1980’s, Kisumu was Uganda’s major import source. Ugandan traders heavily relied on the supplies from Kenya. As trade started booming coupled with the coming of the Indians in Kikuubo, there was increased demand for more items. Local entrepreneurs started visiting the Middle East. Dubai was the first point entrepreneurs got supplies. As time went by, traders started flying to other countries like China.
Around 1995, Chinese came to Uganda but those who came took samples of the major imports manufactured from Kisumu and Dubai. Went back to China and set strategies on how to attack the market. Uganda is a poor country. To survive in such an environment as an entrepreneur, you need responsive customer goods that are both affordable and easily accessible.
In response, Chinese huge investments in understanding the consumption patterns of the masses. At the time, products from Kisumu and Dubai were relatively expensive in relation to people’s earnings. Chinese understood the market and the pains of the consumers. As an entrepreneurs, you should see an opportunity and cease it immediately. Chinese grabbed the opportunity. For a low- end market, targeted customers have only a shallow wallet and have to compromise the quality.
In return, Chinese started manufacturing similar but low quality products. The products are cheaply priced as low as Ugx500. Brother Import and Export is a Chinese supermarket located in Kikuubo. Most of the consumer goods are Chinese made characterized by low standards and no value for money.
Aggrey Small is a shoe business dealer running a stall in Owino market. He has been in the shoe business for the past decade. ‘’I used to import second hand shoes from Europe. However, they are more priced compared to brand new shoes from China,’’ notes Small. ‘’With Chinese brands, they are fast moving since they are cheaper in comparison to other brands.’’ Added Small. Most Ugandans don’t mind buying a new shoe this Christmas and another one for Easter.
Value for money?
What differentiated Indian products from Chinese goods is simple; Indians take into consideration value for money. Their products are genuine and long lasting. The quality of the Chinese products born to be bad?
Chinese products are cheap and of inferior quality. In the construction industry, Chinese- made steel is known for cheap but low quality. China can technically make premium products, but lag behind in controlling the manufacturing cost of such genuine products. They mastered the production of cheap products at cheap cost, but not yet skilful at making their great products cheap. This phenomenon applies to many products, including, LED, cloths, toy products, radios, TVs, refrigerators.
Who is to blame?
You can’t blame the Chinese. Blame the traders and consumers who buy the substandard products. China companies understand the unique export market needs. They make products depending on the sophistication of the buyers in the country they are selling. For the American or European markets, Chinese products are of very high quality.
For authentic Chinese brands, you are not quite sure if parts used by Chinese companies are genuine. Stainless steel inside may be claimed as 304, but in fact it’s only 202. Rubber packing rings may be made of cheaper plastic and causes leaking products are of very high quality.
It’s hard to mandate quality using the central government. The case in Uganda is failure by Uganda National Bureau of Standards (UNBS) to control such goods. There is need to guarantee consumer choice and protection.
FOR MORE; READ THE SUMMIT BUSINESS MAGAZINE. NET/ VOL. 09 ISSUES 05 November- December 2016.