Games Consoles & XBOX in China

[yctp]

A few people have discussed XBOX and Games Consoles, and I've been asked about sourcing them.

I'd like to make mention of this issue briefly here.

Electrical Goods & Computers

I’ll talk about parallel or grey importing using computers as an example first, and then follow on to briefly discuss games consoles and Xboxes.

Brand name electrical goods and computers can be found here in China.

However, when you start trying to take them into other countries, then you fall into the legal morass known as parallel or grey importing.

The parallel or grey market is the trade of something legal through unofficial, unauthorized, and usually unintended distribution channels.

For example: To export anything made by Dell™ in China, to the US, would be considered by Dell™ US to be poaching on their territory.

Sometimes the practice of parallel or grey importing is illegal, but not always so.

Many of the parties concerned with the parallel or grey importing of a good are usually the authorized agents or importers, or other retailers of an item in the target market. More often than not this is the national subsidiary of the manufacturer, or one of its related companies. In response to the ensuing damage to both their profits and their reputation, many manufacturers, and their official distribution chains will very often seek to restrict the parallel or grey market.

Such responses can breach competition law, particularly within the European Union.

Competition law, in the United States is known as antitrust law.

Refusal to Honour Warranties

Manufacturers have the right to refuse to honour the warranty of an item purchased from parallel or grey market sources, on the grounds that the higher price you should have paid on the non-grey market reflects a higher level of expected service.

Additionally, companies may provide the warranty service only from the manufacturer's subsidiary only from within the intended country of import, and not in the diverted third country to where the parallel or grey goods are ultimately sold by the unauthorised distributor or retailer.

This response to the grey market is particularly evident in electronics goods market.

However, there is an interesting and important point of note here.

Dell™, along with the majority of brand names, buy bare-bones systems, which have been manufactured in China; then they simply tart them up a little, slap their brand label on them, and now you have a Dell computer.

In fact, almost 80% of all the world's laptops and notebooks are manufactured here in China by a handful of OEM or ODM companies, who simply brand the cases for those large known foreign buyers who sell those brands to us on our high streets.

One OEM, Quanta™, for example, has made portables for Dell™, Gateway™ and Apple™, among others.

Another example would be Inventec™, probably being the biggest server ODMs, and one of the top 4 Notebook makers worldwide. Inventec 08’ revenue reached 10 billion dollars.

But you probably haven't heard of either Quanta™ or Inventec™, have you?
So, why not have your own brand made, using the same suppliers, and at the same quality?

There are many smaller OEMs or ODMs you've never heard of and who produce excellent quality goods, as Quanta™ and Inventec™ will only take large orders, and much of their capacity is taken up in the production of machines for the big brands.

I have a very nice contact with a company here in China who produce for Elonex™ in the UK. You know, those guys who claim to make the cheapest laptops or notepads in the UK.

It will cost you far less to do so than you could imagine.

I can help you find one of these OEM or ODM companies to produce the goods you require, at the quality and specifications you require, at less than the cost of many of the big brand names.

If that’s your bag.

Now let’s get onto the subject of XBOX and games consoles.

Understand that the Chinese know that you want these items.

Your need makes you a delicious, juicy, succulent, and very ripe target for the unscrupulous.

I regularly come across people who have a couple of hundred websites selling everything you can possibly think of.

I’m not too fond of the idea of selling parallel or grey goods, as just to find a bargain involves a lot of checking to ensure that I, and whomever I finding for, won’t have a new arsehole torn.

My final point is this. If you are a buyer, and you aren’t in China, and you don’t have the opportunity to come and meet your ‘supplier’, then, know there is a statistically very high chance that you’ll get ripped.

Currently, I don’t have a supplier, but I’m sure I can find one, if I convince myself I want to do this.

However, I’m not sure I do just yet.

All the best,

Ken Stone

[Netsoft]

Hmm, so what you're posting here is a general information for us readers or you are telling us that you can possibly source for items?

[Motor-City-Sports]

Originally Posted by Netsoft Hmm, so what you're posting here is a general information for us readers or you are telling us that you can possibly source for items?

If I was you NETSOFT I would take His advice, He seems to know what he is talking about. Also it is hard to find honest people!

[yctp]

Originally Posted by Netsoft Hmm, so what you're posting here is a general information for us readers or you are telling us that you can possibly source for items?

I'll source anything.

All I'm saying is that the idea of sourcing for parallel or grey importing purposes does not appeal to me, and isn't something I necessarily want to do. Neither do I think it to be either safe for the trader or the eventual owner.

This won't persist much longer either, as Sony has already decided it's going to go after and prosecute parallel or grey importers of their products in Europe. That will be the testing ground, and then they'll push for the same practices elsewhere.

There are loads of great products on the market here, which cause one can legally, and without infringement, export.

All the best,

Ken Stone

[Netsoft]

Originally Posted by yctp I'll source anything. All I'm saying is that the idea of sourcing for parallel or grey importing purposes does not appeal to me, and isn't something I necessarily want to do. Neither do I think it to be either safe for the trader or the eventual owner. This won't persist much longer either, as Sony has already decided it's going to go after and prosecute parallel or grey importers of their products in Europe. That will be the testing ground, and then they'll push for the same practices elsewhere. There are loads of great products on the market here, which cause one can legally, and without infringement, export. All the best, Ken Stone

I am interested in sourcing for Ipods and Iphones from China. Can you do these for me?

[Netsoft]

If that is the case, what is the possibility of you finding a good and reliable supplier of Ipod and Iphone from China? (Original and Genuine Iphone)

[yctp]

O.K. let me put it this way.

Every region has its’ own official distributor(s) who are licensed and engaged to distribute for the producer into a given region.

That means, that even if I were to contact the relevant distributor for the Chinese market, that distributor would not allow me to purchase from him/her with the foreknowledge that I planned on having them shipped out of China, for fear of losing that very valuable license.

Even if they took that risk I'd only get them at wholesale, pay for shipping, and my fee - so how much profit would there be left in it for you. However, I don’t believe a genuine distributor would allow me to do that in the first instance. Not for a heart-beat.

But that, in and of itself, isn't the major issue – there’s more.

If he/she did agree, particularly with that foreknowledge, then I would have to suspect something dodgy was going; more dodgy than my request to the licensee to parallel or grey import these products into other regions of the world, not under his or her license mandate.

As you are perhaps aware, or perhaps not, China has a problem, in that foreign mafia regularly send people into China masquerading as representatives of very large corporations such as Apple, Sony Corporation, and many others.

These people, then give product plans to their targeted Chinese companies and, after inspecting their factory, issue them with a fake license to produce and manufacture on behalf of these big names.

The Chinese companies genuinely believe that they are licensed to do so, as these mafia are very good at there jobs and have a strong financial backing to support their claims. They’re professionals.

They then go on to set up or give people (probably there own) “license” to act as “official distributors”.

However, when once YOU buy these goods (because that’s what even many chain stores end up buying) and sell them on, your prospective client may find, should a problem arise, that their product identification codes do not coincide with those on the company database, and will be left without warranty, on a product that is a clone; and so will be left without recourse, but to turn back to you, who would then look back to me, and I would have to look back to the “distributor” here, who would have to look back to the “licensed manufactory” here.

Not an appealing prospect.

But that is what is happening, and, morally speaking - in terms of the duty we owe to our prospective buyers, I really think we’re better off out of it.

It’s a morass. It really isn’t a fun pool to swim in.

There are, however, a lot of legitimate high quality, great design, top of the range, as it were, “no-name” products available, which compare technologically very well with many of the “big brands”.

Anecdotally, I have a nice little Chinese made no-name 1 GB USB memory stick I bought here in Beijing, in a tech market, about two years ago. It’s great. I was shocked to discover one day that I’d had the thing in my pocket when my trousers went into a 3 cycle wash and spin.

When hanging out my clothes to dry I discovered it with a yelp, thinking, “That’s buggered then”. I put in a shelf for a day or so, then picked it up and stuck it in my computer in the forlorn hope that it might just work.

To my surprise, it opened up a window in the blink of an eye, as it usually did.

In fact, a large number of clients have brought data on USB sticks with big brand names, and they all open slower than my little no-namer, which is Blitz fast.

Anecdotes aside: I have mixed feelings on the subject as a whole, in as much as my business instinct is to make a buck. But, my moral sense of right and wrong, in respect of the end user or buyer, baulks at the idea of even considering the potential risk to them as buyers, and to my personal sense of honour. Yes, some of still hold onto that old fashioned notion. Quaint, huh?

For me, it has always been about the road I take, and not simply attaining the final destination, without due consideration as to how I get there. I have always wanted to arrive at or achieve my destinations, and goals - whole, intact, and more of, NOT LESS than, a person than I when I started out on the journey or undertaking.

International mafias are very pervasive and convincing.

Not my cup of tea I’m afraid.

The above mentioned scenarios are equally true for big brand apparel, trainers, cameras, and computers etc.

"Welcome to the real."

[Netsoft]

That was very informative post to me. Thanks for your reply to me. I will keep that in mind. It's rare of to see such a honest people in this forum.