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China’s “Quality Fade.” Is There Really Such A Thing And So What If There Is?

Posted in China Business

Many years ago, a number of people (china consultants, in particular) were applying the concept of quality fade to China. The idea was that once a foreign buyer became comfortable with its Chinese manufacturer, it could expect that manufacturer to start skimping on quality to save money. In other words, your product might go from being 10% copper to 5% copper without your Chinese manufacturer telling you of the change. Or your laptop bag handles might go from being strong enough to hold a laptop to not being strong enough to hold a laptop. Nearly everyone, it seemed (including me) bought into the idea of quality fade.

I no longer do.

And not only am I not sure it is a persistent phenomenon, I am also not even sure that the concept is relevant even if it is.

First though, I am going to discuss what it is that has caused me to re-access “quality fade” so many years after I (or it seems anyone else) has used (or even thought of) that term.

The Wall Street Journal ran a story, entitled, Chinese Asbestos in Australia? Blame ‘Quality Fade, in which it talked of how ”two leading Chinese car companies, Great Wall Motor and Chery Automobile, confirmed that they are recalling 23,000 cars and trucks they’ve sold in Australia because asbestos was discovered in their engine and exhaust gaskets.” The article (wrongly I think) describes these mistakes as defying explanation. Greg Anderson, a very thoughtful and knowledgeable China consultant (with a focus on automobiles) asks on his Facebook page whether “Chery and Great Wall are the victims or perpetrators of ‘quality fade.’” [Note that this post was set to run years ago, but has been sitting in the "draft" folder ever since]

Who cares? And is the entire “quality fade” concept simply another way of trying to make China look bad? Is it racist even?

I do not think it racist, but I also have come not to believe it fair either.

Let me explain.

I just got back from speaking at a massive consumer products fair in Las Vegas on sourcing product from China successfully. As you can imagine, I talked a lot about preventing quality problems. I did not bring up a statistic I was once told by a higher up at the US Consumer Protection Agency on how China has product safety/recall problems at a rate of at least six times that of any country every single year. And this is per product made, not overall. I am not going to dispute that China is probably the worst country on earth in terms of making products “right.”

But something one of my audience members told me after my speech has really stuck in my head. After the show and by way of small talk, I asked an audience member what he thought of the products show. I expected him to say something like “it’s huge” and then move on. Instead, he launched into a very sophisticated and thoughtful discussion on how almost everything at the show was junk and on how he had always thought that as we became wealthier and as our technology advanced, product quality would improve. Instead, he said that people just don’t care about quality any more.  I told him of how Nordstrom was thriving and his response to that was because they are becoming somewhat of a bastion of quality and so they are getting people from other stores because of this and of how most Americans have become focused on price to the exclusion of quality.

He then went off on how it is America’s fault that China produces “crap” and it is our fault because we buy it. He analogized it to our blaming foreign countries for our own cocaine problem. He then talked of how he had sought to have a product well made by a Chinese company and the Chinese company said that it was making similar products for ten or so other American companies and that none of them were requiring that it make the product at the standards required by this guy and so no matter what the price, “it would be too difficult and they were not interested.” This guy insisted to me that his quality standards were not all that high and that they were pretty much the same as the quality standards at which he made the product in the United States years ago.

Why then is “quality fade” irrelevant. It is irrelevant because in the final analysis you will get the quality you demand and if you don’t get that quality, it is up to you to go elsewhere to attain it.

What do you think?

For more on sourcing product from China, check out the following:

  • bystander

    I’ve always thought the same as you think (or what I take to be your position). If a company is a sophisticated manufacturer of something, then they are experts in quality control. They know everything there is to know about how to control and check product coming out of a factory. The US went through terrible quality ordeals with its cars back in the 90s, and the Japanese finally embarrassed the crap out of them with some US-located Toyota plants that turned out very high quality cars. And the Japanese opened up and shared their processes with the US companies. It never had anything to do with where the cars were made, it’s all process. It’s all management and expertise in quality control. And if you decide one fine day to slash the cost of goods by 40% and make some phone calls to have your widget made in China on the cheap, then you’re going to get a cheap widget and all the bad quality that comes with that. Apple/Foxconn has driven a nail into the coffin of the idea that high quality stuff can’t be manufactured in China I think. No one thinks, whatever they think of the iPhone, that the assembly and build quality control of those phones is bad. Lots of deflection and failure to take responsibility for bad factory management and quality control processes IMO.

  • Tiltowait

    No reason they aren’t both true. Quality fade is real. The factory will quite likely try reducing the quality of components over time. It’s not some evil plot, it’s just a manager trying to get some more money for himself, probably because his mother nags him incessantly that he’s not doing enough (no matter how well-off he is).

    • r_s_g

      This is it, right here. It is absolutely true that Western buyers are accepting lower quality, presumably because consumers don’t care, don’t know the difference, or simply want to pay less. That being said, I do believe quality fade exists in China, wherein quality is reduced over time, possibly below the standards set by the buyer. Quality fade is also evident in the Chinese service industry, where work product quality (whether a meal at a restaurant or a document drafted by a lawyer) also slips over time.

  • stevelaudig

    What you seem to be describing is a “fade” in demanding quality.

  • Mutou

    I worked for a very large, international Chinese OEM company and quality fade exists, even there (not to mention small factories), and at least some cases are pretty easily explained. Product A costs $7 to make and is sold for $10. Then over time, certain expenses creep up or the higher-ups demand more profit to pay for overhead and the factory is left trying to figure out how to make A for $6 (because pricing can be very inelastic when dealing with large retailer or brand partners, or because the client will switch factories if they raise prices again). And then the thought goes, “well if 8 mm of steel is okay, i bet 6 mm would probably be fine as well.” And so it goes.

    It’s driven by increasing costs and inelastic pricing; when the manufacturer is squeezed in the middle they will find a way to drive down costs, and often it is at the expense of quality, especially when investment in increased productivity is usually off the table.

    • conagd2@126.com

      Quite agree with that. You know it well. Karma Basket the Chinese.

  • Robert Walsh

    Quality fade is real. It’s a combination of failure to inspect what gets loaded into each and every container, and ruthlessly forcing a manufacturer to concede to rock bottom prices. Combine the two, and I can guarantee that the manufacturer will look for any and all ways to clawback something like a profit. Either that, or they will job it out to a cousin who can do it cheaper.

    • On the Corner

      exactly!!

  • Ward Chartier

    There are a number of different kinds of fades. For example, human beings will perform at a certain level, then relax that level to just below the threshold that customers or managers complain and react. This phenomenon is taught in human factors classes to industrial engineering students. Fade behavior can occur in any industry and in any country, and is certainly not unique to China or other low-cost manufacturing countries.

  • http://www.procurasia.com/ Etienne Charlier

    Dan, you highlight an important point here: in many case the purchaser is getting the quality he/she is asking for. Or at least he/she is a willing accomplice to eroding standards. And the final consumer probably as well.

    I believe that there is a quality fade trend in China and that it is important to keep supplier under pressure to ensure quality.

    However, there is another trend, re-informing quality fade: the continuous pressure to get cheaper and cheaper stuff and an implicit willingness or acceptance to see eroding standards.

    Like you say, whether quality fade exists or not is not the only point. The other point is that we have accepted that many of the products we use have a much shorter life than before and we find these gradually reduced standard normal.

    I have at home a stapler (made in the US) and a plastic ruler (made in Germany) which I purchased in the late 80′s. Both are still working much better than the multitude of much cheaper items I purchased since then. And I keep them as a reminder of what is possible.

    It is not my purpose to excuse poor quality Chinese manufacturers. At the same time, the non Chinese side of the (out)sourcing transaction must also take some responsibility.

    • Mutou

      Basically agree to everything you are saying. For example: the purchase price for an electric rice cooker (very specific example, but bear with me), from Guangdong has DROPPED about 15% since the mid 1990′s, despite wages rising about 500 – 600% (roughly), and all the associated compliance costs, raw materials, blah blah blah. Chinese producers are under tremendous pressure to meet an inelastic price point – the infamous Wal-Mart “price-led sourcing.” Meet the price point or don’t do business. So, even a good supplier is limited in what he/she can do – the price points often do not allow for good products to be made, only “good enough.”

  • http://heilmanasiasourcing.com Rdheilman

    If you want to see quality fade, start in any North American retail store. Almost any item is of lesser quality than the 5 year old counterpart that you might find in your closet. In some cases, such as mattresses, the degradation is well concealed. These products have not deteriorated because the Chinese made them worse through deception. Instead, they are worse because the US based seller has deliberately chosen to degrade their product through design.