I've lived throughout Chinain a variety of cities for about half a decade, giving me, perhaps, somewhat of a unique Western perspective regarding the red hot economy in the East that seems to manufacture almost everything that we buy. Chinais a diverse country, to be sure, with a plethora of different nationalities living within its borders, and with geographical features including jungle, grassland, temperate forest, gorges, mountain ranges, and desert. To be sure, the governance of such a country cannot be an easy endeavour, however, a common denominator seems to have unified all the people in Chinarather quickly and effectively: money. The relatively recent economic reforms by the central government, first initiated by Chairman Deng Xiao Ping, have seen China's economic situation drastically change from mass famine during the Cultural Revolution to emergence as a world economic superpower.
Indeed, few would deny that Chinais the factory of the world for a great variety of products, from electronics to socks (and - of course - furniture); a brief audit of your common household items will probably reveal that over half of them are "Made in China", as they say. The manufacture of products in Chinais highly profitable due to the relatively cheap cost of labour, tax breaks, foreign investment, and – in my opinion – inertia. The proverbial "race" to build factories has resulted in massive economic centers springing up in certain areas, resulting in a modern-era industrial revolution of sorts. With respect to furniture, the most well known manufacturing centers include Shanghaiand surrounding area (most notably Pudong), and the province of Guangdong(Canton), particularly the cities of Shenzhen and Dongguan..
As part of my duties for Wholesale Furniture Brokers, I recently traveled to and toured factories in Shanghai, Nanjing, Shenzhen, and Dongguan. My first stop was a factory in Pudong run a by an Australian business mogul of sorts, that specialized in the production of leather and microfiber sofas. Being a fellow Westerner, he of course was quick to point out quality control procedures and his selectiveness in choice of materials, in one instance pointing out high quality durable foam that was shipped all the way from the opposite side of Chinadue to its unavailability elsewhere. Leather used in the sofas was carefully stretched and checked for imperfections before being accepted from suppliers, and joints in sofa frames were "cut-in" as apposed to simply stapled together, offering improved durability / stability.
The efficiency of the factory was demonstrated by the floor plan, as product moved from one stage to the next, in the logical progression of production. Certainly everything seemed to be moving in clockwork, and it was fascinating to walk through the process from inception to completion. I was then led to a massive, well lit showroom, displaying sofa sets of all types, including sets constructed of a microfiber that appeared very much like leather. Prices were thrown around for a while, and I took some notes down for future reference. However, as time was of the essence, we exchanged business cards, bid our farewells, and I, encouraged by what I had seen, headed back to my hotel.
The next morning, I caught a train to Nanjing, and after a couple hours of passing seemingly endless towns of varying sizes, I arrived to be greeted by a small party of eager Chinese. I was then driven about an hour out of the city to their factory, and was casually shown around the factory. The "guide" who had been assigned to me pointed out "advanced foreign made equipment" to me with a childlike enthusiasm. True to a typical tendency of the mainland Chinese, of course, the guide constantly quoted numerous prices to me at an astounding pace: the initial investment of the factory was this many million US dollars, that piece of equipment is worth half a million US dollars, the minivan we drove to the factory costs twenty thousand US dollars, and so on and so forth.
The factory produced a wide variety of wood products, including hardwood and veneered pieces. I watched intently as a sheet of veneer was created by pressing a layer of beautiful wood onto a sheet of processed wood smeared with glue. Factory workers were all busy methodically performing their tasks in a manner that seemed to me to be a quintessential balance of chaos and order. Nevertheless, the system seemed relatively efficient.
At about one o'clockin the afternoon, production ceased entirely due to "lunch break and afternoon nap." It was quite astonishing to me indeed that work shifts were not staggered, however I neglected to enquire as to the reasoning behind this, assuming that the heat was a factor in this policy (Nanjingis known as one of the three "furnaces" of China). After a quick chat, I was invited to lunch by the manager of the factory.
The factory manager was a very generous host, offering a delicious meal of salted goose and a variety of other dishes at a restaurant that more resembled a luxury hotel, complete with private rooms and waitresses. We toasted a couple of glasses of baijiu (essentially Chinese vodka) and before long were chatting away regarding a variety of topics. This sort of meal / drinking is common in China, with a not insignificant proportion of business being done with the aid of potent alcohol. I can't help but be reminded of an old Latin saying when I think of business meals in China: in vino veritas (truth in wine). Perhaps this is one of the reasons that alcohol plays such a seemingly important role in the Chinese business world. Certainly, from experience, I can say that imbibing alcohol with someone brings a certain feeling of comradeship that apparently transcends cultural differences. I was certainly glad to have a couple of hours to snooze on the train back to Shanghaiin the evening.
A few days after taking a flight back to my head office in Chongqing, I accompanied our company’s President Dave Zirnhelt to a trade show in the Sichuanprovincial capital of Chengdu. At the trade show, we saw a host of acutely artistic and elegant (and extremely expensive, up to USD 50,000 for a set) ethnic furniture, as well as mattresses and other more conventional furniture. Although we had been actively monitoring the growing furniture industry in China's southwest regions, we were unfortunately still largely unimpressed with the price / quality ratio, and quickly concluded that furniture industry in the region would require additional time to mature.
After a weekend of relaxation, we made our way back to China's east coast, this time to the southeast provinceof Guangdong. We first arrived at Shenzhen's international airport, and in no time at all, were whisked off to our first destination: a factory on the outskirts of Shenzhen city. While on the way, we passed some huge depots that held thousands of shipping containers, underscoring the massive scale on which goods are exported from China. A couple of decades ago, Shenzhen was but a fishing village, but due to its close proximity with Hong Kongand its designation as a "Special Economic Zone", the city has burgeoned into a sprawling metropolis.
For all the hype that I'd heard about furniture manufacturing in Guangdong, I was quite surprised by the majority of factories that we toured there. In addition to being quoted relatively high prices, we had some quality concerns. Unlike what we had witnessed in Shanghai, sofa frames were put together with varying degrees of quality, and with material that we considered somewhat sub par. When we expressed these concerns, talks quickly turned from lively to cold and guarded.
The next day we made our way to Dongguan, which is essentially a city with at least a couple of factories and furniture showrooms on every block. We toured a multitude of factories on the first day, however, I found that overwhelmingly, the factories that I toured that day were not terribly well endowed with organizational or technical prowess. Some smaller scale factories were even set up in large buildings resembling garages, and apparently manufactured product only after receiving orders. In addition to these rather disheartening observations, the prices that we were quoted were far too high.
On the following day, we finally had some luck in touring a larger factory that was already manufacturing a lot of furniture for other big name furniture stores in the US. Touring a complex of factory floors, we were shown the many different products produced there. Unlike the other factories in Guangdongthat I had toured on this visit, this factory was eager to display its quality management techniques, and this was somewhat comforting. After viewing seemingly endless dust-filled production floors, we finally made our way to a massive multi-level showroom.
Inside, we discovered many different varieties of furniture, about which we asked many questions and took just as many photographs and notes. We were accompanied by a "furniture engineer" who eagerly provided expert answers on questions or ideas we had for design change. We spent quite a while discussing the guides and support of drawers, as well as the “slat system” used for platform beds; a multi-slat system of course being more easily shippable and convenient as well as more durable.
In coherence with general protocol, we were invited to lunch Cantonese style, and I once again slugged back some baijiu and discussed the possibility of future cooperation.
Certainly, there are factories of varying quality in both the Shanghaiarea as well as in Guangdong, but in our case, there was an essential difference: our company has more connections in Shanghaithan in Guangdong. In China, perhaps the most important resource is guanxi (relationships), the importance of which permeates all aspects of Chinese life, including business relations. The advantage of touring a factory and not doing business through a third party such as a trading company is clear – it's more personal. The Chinese don't view business in the same way that many Westerners do; they view business as a relationship. Thus, they're generally more eager to do business a company that is somehow connected to their social network. In China, the saying "it's just business" doesn't really apply; a successful businessman needs to make an effort to understand and connect with the people behind the product, not just the product in and of itself.
To be sure, doing business in a foreign country brings a host of challenges; however, a little effort can make a world of difference. At Wholesale Furniture Brokers, we're committed to sourcing high quality furniture at the best possible price, and to passing that value on to our customers.