How a Million Dollar Product failed due to Lack of Experience with Chinese Factories

The reason to write this article is the misconception that everything can be done easily and cheaply in China. This is what I often hear from customers who have never produced anything and their only experience is a few successful purchases from Aliexpress.

The difference between buying consumer goods from Chinese sites and producing a product or any component is huge.

As always I write stuff that is based on real experience. Today I decided to share with you such story and give you the lessons we learned at Zekeng some time ago.

Here is the story

Everything happens in the summer of 2015. A client, for whom we worked on a product, got inspiration from a competitive product and changed the concept of the heater.

Instead of the casual heater wire, we decided to use heater which is a metallic conductor, printed on a flexible band. The technology is very similar to that for making flexible ribbon cables and flexible printed circuit boards. The only difference is that instead of copper a specialized material is applied.

Why?

Using this technology we were able to reduce the device size, to achieve more rapid heating of the evaporation chamber and to optimize the battery consumption.

It sounded like a great deal until everything went wrong!

The factories that could make such heater were only 2. One was based in the US and the other in China. Due to the very high price, we refused to use the services of the American factory, and decided to try the quality in China. Chinese factory also became a candidate for a supplier once we reach the mass production phase. We only needed detailed information about metal that is to be used in the factory to calculate the length and thickness of the wire.  After many emails we didn’t receive this information. I can not tell you the exact reason, but we assume that it is some kind of preservation of know-how.

Lesson #1 Sometimes it is impossible to access tech information from the factories

Another thing we noticed, is that once we sent an inquiry to the factory, the next day we received several competitive offers from other factories. Later, it turned out that the factory is the same, but we were inundated with offers from other companies with different names. This is the next lesson:

Lesson #2 China is the largest equalizer of information

What we have also learned, not only from this incident, is that Chinese always answer with ‘YES’ and always agree with the client. Once I had the opportunity to meet Ivan Velkov and to hear his great lecture based on his life in China. I realized that answering with ‘NO’ is even considered impolite.

Although we feel better when we get ‘YES’, it turns out that the result is not that good. Why? Because

Chinese do what they have in mind although it is sometimes opposite to your request.

We asked several times via e-mail ‘Will you send us technical documentation?’. Even the answer was ‘YES’ to all of them, we never received e-mail with any of the requested information.

Lesson #3 The Chinese often answer with ‘YES’ even they don’t understand the question

I will give again an example using the heating elements. Since we had no information on the material, we sent an example drawing asking them to make the calculations and to make the missing design in the shaded area. The most interesting is that on the question ‘Can you do it for us?’, they answered ‘YES’.

Here is the drawing we sent:

You can’t imagine how we felt after we got the result. For this mistake we paid $250 and waited for one month:

This is ridiculous since we negotiate with company that makes heaters and printed circuit boards not shampoo bottles! We learned one more lesson:

Lesson #4 The Chinese don’t think, they just manufacture

The last straw was when we asked why they had produced this foolish thing. Then, as a response, we received something like Put it in the device, it might work’. Obviously, they had no clue how conductors work! An engineering factory!?

We came to the conclusion that we had to do our own design, based on material we don’t know. The only way this can happen is to explore it. We prepared a test design of various lengths and thicknesses of wire and sent the order. That cost us another $250 and one month time.

Fortunately, we received what we expected:

After some experiments we calculated all the coefficients we needed and made a new design based on them — another $250 and one month time. Hence the next lesson:

Lesson #5 You need about 4 times more money and time

When the new heater arrived we were shocked again!

This time we got the right heater pattern but solder pads were on the wrong side!

Eventually we were able to make a manual correction and to finish the prototype so we saved $250 and one month time. There was no more orders. Thanks to the collaboration with this factory and several other issues with the enclosure, the product failed in ‘time to market’. For those few months many Chinese replicas popped in the shopping sites.

Until that moment our work was concentrated mainly on non-commercial and niche products. We have successful partnerships with many factories in China and in other parts of the world. This time, however, the product was a mass product. According to the business plan it had to generate revenues over $1 million from the initial sales through Kickstarter campaign.

Conclusion

It is still not clear whether ‘the equalizer of information’ had not delayed us on purpose? Maybe it is a policy to give the advantage of local producers? Who knows? What we know is that Chinese replicas of famous products always appear quite quickly in the market. How it is possible?

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Emil Kirilov

My name is Emil and I’m engineer in electronics. The past 10 years I used to work as a firmware and software developer in established companies. About 8 years ago I found the entrepreneurial spirit in me and I decided to start my own business in parallel. After several unsuccessful approaches during the financial crisis, I settled down and spent several years in learning how to develop business. Assuming the limited resources, I focused on the lean approach and customer driven business models. 3 years ago I found out that I’m in love with the physical products and I joined the company of friend of mine called Zekeng. We finished several products together and I finally decided it is time to leave my job and dedicate to this company and its growth.

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