|As mom insisted when separating you and your brother for a good spanking, there's always two sides to every story (and when dad entered the picture, there was even a third perspective - and an extra set o' hands). With the continuing invasion of better and better Chinese products, there's a shadow side called grey-market importation. Just as Audio Cubes does for Japan, there are three major outfits specializing in China-direct deliveries to pretty much anywhere in the world: NYSound in the US, Cattylink in Hong Kong and Ornec in the UK.
Naturally, their operations undermine formal distributors. In some cases, they prevent certain brands from gaining distributors in the first place. Ever wonder why Melody Valve HiFi Pty's excellent products for example aren't formally represented in America? With NYSound shipping directly from China to your US home, nobody in their right mind will now touch this brand. Bad juju, worse karma. Dealing with the grey marketeers from Bada to Bing, Jungson to Meixing on rock-bottom pricing, you may acquire electronics that were never wired for 120V. It also leaves open questions when it comes time for service. Why then would reputable brands continue to deal with these outfits?
The truth is that in many cases, they aren't. What happens instead is that the grey marketeer sets up relationships with retailers in the country he exports from. These retailers are bona fide "franchisees" for the vendors who have no idea that out the back door, half the products they sell to these particular dealers end up abroad. In fact, these dealers look good with the vendors for the volume they handle and pay for. In some cases, one suspects that the manufacturers know or have a good idea but close an eye for economic reasons (under the rationale that a sale is a sale is a sale). If the grey marketeer has to incur a small percentage above dealer invoice by not buying directly from the manufacturer, that's chicken feed in the grand scheme of things where global currency imbalances and labor rates offset such tariffs once these products end up in the West and compete with homegrown makes for pennies on the dollar.
It's probably more factual than fancy imagination to view much of present-day Chinese manufacturing infrastructure as the Wild West. Anything goes. Wave a bundle of hard euro or Yankee cash or speak Chinese while promising the world from your connections back home and you're instantly embraced and made the newest distributor or importer. Want your own brand? No problemo, señoreno. Commit to enough volume and we'll rebadge the next run and put your name on it. The result? Multiple brands from the same design house whose only distinctions are a different badge, a different price and a different individual selling them.
Of course things are catching up. The more established makers are learning quickly that this short-term gold rush will -- or already has -- hit the proverbial brick wall. It cripples or significantly compromises their chances at becoming real players in the international market. Make no mistake, it's a profound challenge for many reputable Chinese makers. How to close off the many present leaks in their international business affairs? How to identify their unscrupulous domestic dealers who ship to anywhere via on-line cowboys as their middlemen? China's a huge place. Operation Clean Sweep could simply be forever incapacitated by the sheer numbers of the populace - especially during their current 'industrial revolution' and emergence as a capitalist consumer society that offers many their first real chance at economic success.
Naturally, the cyber cowboys aren't the only ones responsible for this scenario. Consumers who deal with them are just as vital a part of the picture. No demand, no supply. As long as the discount mentality continues to rule, WalMart will remain the world's largest corporation. As long as the discount mentality rules, there will be those happy to cater to it. Not for nothing do many Orientals believe that Westerners are peculiar for their focus on short-term satisfaction and instant gratification, all the while hardly ever assuming the bigger view on long-term effects and benign sustainability.
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