Exploratory trip to China
After the last update, many of you were concerned about our decision to manufacture in China. I (Nils) just came back from a factory trip to Shenzhen and Beijing (organized and subsidized by HW Trek) last week, where I took lots of photos and videos. So this is not a typical progress update, but rather I thought I would share some of my learning from this trip with you:
First of all, let me start by saying that I am not vouching for all of manufacturing in China - I am only talking about the things I saw during my one-week trip.
WHY I WENT?
MIITO was selected as one of 30 startups to join this year’s “Innovation Tour” organised by HWTrek. The purpose of the Innovation Tour is to introduce startups and young companies to manufacturing in China. It was a perfect opportunity for me to explore manufacturing possibilities in China and to verify the many myths about Chinese manufacturing myself!
WHAT I SAW?
During my trip I got to see many different facilities with different types of expertise:
- two assembly factories (in house plastic injection molding and final assembly)
- two testing facilities (physical and chemical + radio frequency and safety)
- two PCB (electrical circuit board) manufacturers
- a display manufacturer
- a huge manufacturer for smartphones (and, weirdly, cars, batteries and much more)
- a packaging factory
- a prototyping factory
WHAT I LEARNED?
Manufacturing / Production
- Factories in China are easily 4-5 storeys high, with heavy manufacturing machines across all floors. This is truly impressive and something I have never seen before in Europe. However I noticed that none of them ran at full capacity: I saw entire manufacturing halls and assembly lines unutilized. This should mean good news for startups as even established factories are looking for new customers. There are even factories that set up company units specialised in providing manufacturing services to small startups.
- Variety of scale and skills: There are factories of all shapes and sizes in China. From small to medium to large - and even the chinese version of large: gigantic! I saw a factory with thousands of employees - but was told on the way out that this was only a small factory. The next day I visited a factory with over a hundred thousand employees. It was incredible to see the large variety of types of products this gigantic factory was able to manufacture, from phones, to batteries, to cars. I had heard about this before but seeing this with my own eyes was mind-blowing!
- Packaging and printing: Again, the scale is impressive! Huge printers need to test-print about 5.000 sheets of paper to calibrate to the correct color, and these will all just go to the bin. For example, if you “only” want 5.000 prints for your packaging, you would actually have to print 10.000 sheets and throw out the first 50%! This is why, it is advised to order prints for multiple packaging batches at once, to avoid excessive waste. Packaging is about volume!
- Confidentiality: You often hear that IP (Intellectual property) protection does not exist in China. However, from what I saw during my trip, I believe that it is all about finding the right partner. For example, during some of the factory visits, I was not allowed to take my phone along, to make sure I wouldn’t take pictures. This showed that the factory was very sensitive to the privacy of its customer information. Testing how a factory handles sensitive information of its other customers is certainly a good indicator for how they might treat yours.
Environmental / Social:
- In general, this is a topic that is handled very differently by different companies. I saw two PCB manufacturing facilities that were diametrically opposed about how they treated both their workers and the environment.
- Working conditions: This is probably one of the biggest worries of so many of us - what are the working conditions inside these factories? How are the workers treated? The answer is mixed. I saw factories that were extremely safe, organized and well managed. The workers wore safety protection and handled the machines with care. On the other hand I also saw facilities where I got very doubtful about the workers’ safety and health. Each factory has different standards, meaning we will need to closely inspect our partners before engaging in a relationship.
- However, it was reassuring for me to see, that there were also “good” factories, which cared about waste management and working conditions. So just deciding to manufacture in China, doesn’t automatically mean you have to compromise on your personal values.
- Serious tea commitment: China has a serious commitment to tea, and the tradition and rituals that surround tea preparation are something that I find inspiring! In one of the factories I visited I found a separate tea room that was exclusively used for welcoming clients - and drinking tea!
As a summary, I would say that you can find pretty much anything in China: from really tiny to gigantic, from manual to automated, from environmentally-conscious to unscrupulously polluting, from highly-skilled to unskilled - the whole range of what can be imagined - it is all about finding the right partner!
I am very thankful to HWTrek for inviting me on this intense 1-week trip that was packed with factory visits and allowed me to get a good impression of chinese manufacturing. I am also very glad that we have Crystal on board in our MIITO team, to help us navigate through this jungle of manufacturing possibilities that awaits us there. And I am confident that China is the right place to manufacture MIITO.
This is all for now, we’ll be back with info about the progress soon.