The internet alarm bells

SA firms that receive poor-quality or incorrect products from China unlikely to get any help

A South African company importing goods from China has learnt a harsh lesson: do not order via the internet.

Experts warn that it is best to visit the factory claiming to manufacture the goods.

Lillimex, a South African importing and exporting business that recently ordered chemicals from China but received sand and lime, says importers who receive poor-quality or incorrect products from China are not likely to get any help to resolve these problems.

Lillimex says it has turned to numerous sources, including Chinese insurance company PICC, which confirmed the product on the insurance certificate, as well as to the Chinese Embassy in Pretoria, but without success.

According Lillimex, the embassy said that such scams were common and that enquiries lead to nothing.

Although Lillimex placed its order with a verified company on the internet, it still ran into problems.

Dominic Symes of importing and exporting company Direct Imports said when he first started importing from China in 2004, he also run into problems.

The quad bikes were completely different from the product he had ordered and it took him months to sell them.

“Since then, I have been much more careful about the companies where I buy and I first check their transaction history.

“What helps a lot is that I visit the suppliers’ factories in China to ensure they are really manufacturers and actually exist,” Symes said.

To have an agent in China could also help, but the problem is that they do not always have technical knowledge of products, or sometimes the agent negotiates a different price with the supplier, which is not always in your favour, he said.

“The best option is still to visit every factory personally to examine the product and check its quality yourself.”

Hannah Edinger, a manager at Frontier Advisory, which conducts research and advises on investment strategy in emerging economies, says there is a general lack of knowledge and understanding between Chinese and South African businesses.

She said companies in China are relationship based. Interaction between the parties is important and will help to build a relationship of trust, especially given the different cultures and practices in China, as opposed to the Anglo-Saxon-type of approach that South African companies are more familiar with.

She also strongly recommends that importers visit factories in China first, which will help to build a relationship, and at the same time the importer can check the product specifications and look at samples before any orders are placed.

Then one can appoint a quality-control specialist to check the products before they are packed and shipped.

In addition, all documents and correspondence should be preserved in case a dispute arises, and companies should always make sure they have a good interpreter or facilitator who understands their needs and can assist them on visits to China.

Dirk Kotze, a director of the China-focused international advisory and procurement firm Beijing Axis, says it is irresponsible to place orders via internet directories like Alibaba or Global Sources.

He says although people can also lose out in negotiations with companies in other countries, China is the biggest risk for Western importers because of the great language and cultural differences.

TIPS FOR IMPORTERS

Since China has not been active in international trade for long, it wants to make money quickly. This often leads to poor-quality products.

China’s biggest problem is that the Chinese have no “vision of quality”. Even if they say they have, it doesn’t work so well.

Most manufacturers cannot stick to quality guidelines. Quality is variable. And since they do not want to bear the cost of the defective products, they pass it on to the buyer.

At manufacturers, only the staff in the export department speak English. The number of people who really understand it is limited. Even if it looks as if they understand, they don’t.

Even if someone seems to understand and agree with you, and you are satisfied he does and knows what you want, it will eventually appear this might not be so and he made a different product from the one you wanted. That’s why it’s important to work with an agent. If you have been to China once, you will understand what we mean.

Source: Hengyi Consulting, a Chinese commercial agent

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