December 21, 2022

Product Development in China: 5 Potential Risks with Solutions

Most businesses constantly look for ways to bring in the highest quality products while keeping costs down. To ensure their team stays ahead of the competition, considering product development in China should be part of their strategy. 

But before taking that leap, there are certain risks and challenges associated with working on something so remote. From shipping logistics to IP protection – not being properly prepared could mean wasted resources or, worse, disappointed customers. 

You might think that COVID-19 has made the situation even more complex, and the product development industry may have taken a back seat. 

But the reality is different – According to the McKinsey report, " COVID-19 disruptions have shaped the Chinese development sector by accelerating five key trends; digitization, declining global exposure, improving competitive intensity, consumers coming of age, and private and social sectors set-up."

So why not bring your product development project to the continuously developing Chinese market - but with caution?

In this blog post, we’ll outline some potential risks of developing a product in China and what your company can do to succeed from start to finish. So get ready for an engaging discussion on how bridging two worlds could end up being perfectly tailored for any tech startup or manufacturing company!

For those who prefer video content, here’s a video summary of what you’re about to read below.

Product Development in China – A Way to Success!

Chinese culture and business practices have a unique way of working when it comes to product development.

Do you still think the Chinese manufacturing sector is the same as it used to be in 2010 - low cost and inexperienced labor?

Sorry, that's not the case anymore!

Well, times have changed, and you're missing out on a great opportunity if you think that way. A lot of things have come a long way after the "Made in China 2025" initiative, which started back in 2015.

The Chinese economy has grown into a highly advanced manufacturing hub with a vast network of experienced engineers, suppliers, and innovators.

The country offers innovative product development solutions using world-class technology - that's what you need, right?

Wait, check out the hidden side before taking that leap.

The Hidden Side:

As you know, advancement brings advanced risks, but with knowledge comes solutions! 

Whether choosing China or any other country for your product manufacturing, it's better to analyze the associated risks to bring your idea to life. Because in case something goes wrong - your project could cost you dearly.

Now you must think if there are so many potential risks, why bother going there?

Well, it's because risks are everywhere, but it's all about how you manage them.

So need not to worry, we also bring the solutions with the associated risks - making sure your success!

5 Potential Risks You Might Face During Product Development in China – Find Solutions Here!

Before we proceed to the risks and their solutions - we need to clarify something!

These are the most common potential risks but not the only ones. Depending on your product, location, and many other factors, you may face other unexpected issues too.

Without wasting any time, let's check out the risks and their solutions, of course!

1. Intellectual Property (IP) Protection Risk:

IP protection is a huge concern when it comes to product development in China. However, all forms of IPs are protectable by Chinese law, but enforcement can be difficult.

The Worst Nightmare:

Getting your product idea and design stolen by local manufacturers and vendors!

But wait a moment - is it really possible?

Spare a minute and think;

  • Why would someone steal an idea that has yet to be launched or popularized?

  • Why would someone take that risk and develop a complete marketing strategy based on it?

Don't get us wrong - we are not saying it's impossible, but the chances of getting your IP stolen at the product development stage are one in a million.

But what if the product hits success?

Now, most of the manufacturers have your design file which you send them for a quote during your product development process.

They will definitely copy it to grab some share of the success!

It's like expecting someone not to be tempted by a piece of cake when placed in front of them.

Then what's the solution?

The Solution:

We know that now you are thinking, "How can I develop my product in China without sending them the design file?"

Not to worry, we have a perfect solution for this - The component Control Method.

But what's Component Control Method (CCM), and how does it work?

Morpho MFG introduces this unique approach based on the idea that instead of sending a complete product design file (CAD) to a single manufacturer, divide your product into components and only send the component design files to the dedicated manufacturers.

For Example:

Suppose you need to develop a mobile phone. In that case, you can send the plastic body design file to an injection molding manufacturer, a touchscreen display file to a glass manufacturer, PCB files to an electronic component manufacturer, and so on.

By doing this, no one knows how your product looks, and now your IP is 100% safe!

But dealing with several manufacturers can be a tedious task - isn't it?

And that's where contract manufacturers like Morpho MFG come into the picture.

We will discuss it in detail a bit later - stay connected!

A Tip:

Don't forget to sign an NDA before sending the component design files to each manufacturer. It's always better to be safe than sorry. 

2. Not Finding a Suitable China Product Development Company:

Out of thousands of product development companies in China, how would you find the right OEM/ODM partner for your project?

Getting stuck with a substandard manufacturing company will result in the following: 

  • Poor quality products 

  • Low-level customer service and delayed delivery dates 

  • Unnecessary wastage of capital and resources 

  • Low efficiency and productivity

Finding a suitable match is like winning a jackpot!

And it's even more difficult while working according to the Component Control Method - After all, IP protection is the priority!

You might have an excellent product idea, but one mismatch will bring your whole project at stake.

The Solution:

Research, Research & Research - It's a no-brainer!

Always take time to research your potential OEM/ODM partner. Check their background, experience, customer reviews, and certificates.

But remember - don't get impressed by their reviews - as they can be fake.

It's always recommended to have a personal visit to the factory before you sign any contract.

A Tip:

Check the registration status and quality control process of the factory. Moreover, the product manufacturer should have at least five years of experience in the product development industry. 

For more information regarding finding a suitable product development company in China - Check our latest read!

Latest Read: Selecting the Right Manufacturing Partner in China.

3. Poor Quality Product in Mass Production:

It's a common problem among product designers.

You have the perfect design, you have selected the right China manufacturing partner, and everything is going along nicely until you place your order in mass production. 

The results - Poor quality product!

Not the one that was expected.

Most Common Trick:

One of the most common tricks used by unreliable Chinese manufacturers is they deliver a high-quality prototype just to win the project. Once they signed the contract, they switched to a substandard manufacturer or reduced quality to save costs.

This way, they can deliver a product that looks similar but lacks quality, leaving you disappointed and frustrated!

The Solution:

No matter how good the prototype is, sending a Quality Assurance team or yourself in person is always recommended to oversee the production process.

You should plan several quality checkpoints during production to ensure that your product meets the required design and quality standards.

But can you manage to be on each production floor?

The answer is No!

That's why you should outsource your quality control task to a third-party company in China. 

A Tip:

If you partner with a contract manufacturing company in China, they can manage your quality control process efficiently. They have professional QC teams to inspect the components of your product at each production stage. 

Related: Outsourcing Quality Control to China.

4. Continuous Fluctuation in Pricing:

The pricing of manufacturing products in China is not fixed and often fluctuates due to several factors. Such as currency rates, tariff barriers, labor costs, overheads, raw material costs, etc.

Continuous fluctuation in pricing often leads to an unbalanced budget and negatively impacts your product development in China. 

You can't predict your exact profit margin while your manufacturing cost is fluctuating - ruining your project ROI.

Don't worry. We have a perfect solution for you! 

The Solution:

Establish long-term business relationships with your product development company in China. This way, it will be easier to negotiate the product pricing and protect yourself from unpredictable fluctuations.

Moreover, you can also sign an exclusive agreement with your manufacturing partner in China that will help you to secure your product pricing for a certain period. 

But remember - make sure to include an exit clause in the agreement too!

5. Delays in Product Delivery:

"Sorry, we are out of stock!"

That's the worst scenario for any business manager - resulting in losing customer trust.

Delays in product delivery can be frustrating, especially if you have a tight deadline to meet. 

This usually happens due to poor coordination between the product manager and the manufacturing team in China. The problem is further complicated due to language barriers - leading both parties to misunderstand each other!

Being a business owner, you know business sustainability is directly related to time management. And you can't afford to lose your customers just because of unexpected delays.

The Solution:

Most of the time, the company you have partnered with for product development in China does not have the necessary resources to manage timely product delivery.

They don't even know several potential risks associated with logistics and shipping in China. 

That's why it is important to outsource your logistics needs to a reliable 3PL (third-party logistics) provider in China. 

Now we know your primary concern is, "how can I manage so many vendors in China?"

Well, in reality, you don't need to. You can just outsource your entire product development process to a reliable contract manufacturing company like MorphoMFG in China - the rest is their responsibility!

Check out our latest blog to learn more about how product manufacturing works in China.

Latest Blog: Offshore manufacturing

Thinking About Product Development in China – Do It Properly! 

Product development in China should not be taken lightly. It requires proper planning, research, and sourcing to ensure a successful product launch.

After going through the above discussion, you should now know that product development in China is not a single-person job. It requires the coordination of multiple teams, resources, and vendors to succeed.

Even tougher while working according to the CCM approach!

Now you must look for a way to make your product development in China easier.

Don't do it all alone - but why?

Ask yourself:

  • Do you have spare time to deal with multiple manufacturers? If yes, then how will you manage them?

  • How will you ensure product quality while being offshore?

  • How will you manage the other aspects of your business like marketing, customer service, and product distribution?

And the answer to all these questions is - No, you can't. Because it requires full-time involvement and no business owner has the luxury of such time. 

So what should you do?

Outsource your product development project to a trustworthy Chinese contract manufacturing company. 

Morpho MFG is one of the leading contract manufacturers in China - with thousands of successful projects under our name!

So, relax and focus on scaling your business while we manage your product development in China.

Curious about how Morpho MFG can help you - let's figure it out!

Check How MorphoMFG Can Help You in Your China Product Development Project

You don't need to be anxious about product development in China anymore. Morpho MFG can take care of it all for you. 

Whether it is product design, sourcing, manufacturing, quality control, logistics, or international shipping - Morpho MFG got you covered. 

In our +7 years of service, we have successfully brought hundreds of innovative ideas to life.

Check out how we tackle the potential risks:

  • We use Component Control Method (CCM) which 100% guarantees that your product is secured from IP theft.

  • We have a pool of hundreds of top-class Chinese manufacturers - which we screened after several test runs and quality checks.

  • Our team of experienced QC engineers can ensure product quality at each and every step.

  • Due to our direct relations with most manufacturers, we will manufacture your product economically at a fixed cost - according to our signed contract.

  • We have a reliable logistics network that ensures timely product delivery - no matter how far the location is.

Now that's exactly what you need and we are expert in doing it.

So, don't worry anymore, and schedule a call with us today to get your product development in China off the ground! 

We believe it's time to open up a new chapter of success for your business and Morpho MFG will ensure that it happens.

Want to learn more about us?

Visit our homepage and explore our services and completed projects in detail. Thanks for reading!

Frequently Asked Questions

Which types of products are suitable to be developed in China?

There are various products that could be developed in China, depending on the needs of your business. Products such as medical equipment, electronics, textiles, automotive parts, and much more can be sourced from reliable factories or manufacturers in China.

Real-time Statistics:

According to the China Export Statistics 2022, "From January to September of 2022, mechanical and electrical products accounted for 56.8% of the total exports."

The Way to Success:

China is now focusing on developing innovative products, so it may be the right place to start your product development journey. If you are the one who is planning to launch a product and looking for product development in China, then Morpho MFG is the right choice for you. Reach out to us today and share your requirements - we will take care of the rest!

Is product development in China cheap?

To be honest, China is not cheap anymore. However, it is still one of the most cost-effective options for product development. 

Make the Right Choice:

If you are looking for a place to manufacture conventional daily life products, you may find several cheap manufacturers from Indonesia, Vietnam, Bangladesh, etc.

But if you are looking for high-level product development services that require skilled engineers and advanced technologies - then China is the most economical place.

Avoid This:

Most of the fake manufacturers or suppliers offer extra-low prices to attract customers. However, they don't deliver what they promised - which may lead to a massive loss of money, time and resources.

Then how to avoid this?

You can avoid potential risks during your product development in China by collaborating with a contract manufacturer like MorphoMFG. Schedule a call with our expert today and find out how we can help you.

About the author

Josh Fairbairn

CEO of MorphoMFG, fluent in Mandarin, Blogger, and Youtuber. Josh loves interesting materials and the craftsmanship that goes into creating innovative products - watches, tech, games, whisky, leather, wood, blockchain & electronics. Josh and his team in Guangzhou, China are striving to create (& consume) the world’s highest quality products. Partnering with entrepreneurs globally to help solve the world's problems - whether small or large.

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