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INTRODUCTION

BACKGROUND

GROUNDWORK: MARKET ENTRY

MAPPING THE COMPETITIVE LANDSCAPE

FORGING AHEAD: YOYO LIP GLOSS’ COMPETITIVE ADVANTAGE

CUTTING THE RED TAPE

CROSSING THE PACIFIC: A TRIP TO CHINA

HURDLES TO OVERCOME

REACHING THE CONSUMER AND BEYOND

APPENDIX

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CROSSING THE PACIFIC: A TRIP TO CHINA

After developing her concept and seeking legal protections, it was time for Angie to consider strategies to manufacture her product. Her first instincts were to have the lip gloss and reel made in her native U.S. As she researched and pursued U.S. manufacturing opportunities, she discovered that manufacturing her product would not be a simple task. The U.S. manufacturers that she contacted seemed to resist her product customization ideas. For example, they placed a limitation on the color of the reels and prevented her from altering the reel to fit her invention. Angie began to wonder if the people she was contacting were actual manufacturers. She suspected that they were U.S.-based representatives of foreign manufacturers – and that they preferred to sell her an existing product that they were sourcing from others.

After receiving many roadblocks from U.S. manufacturers, Angie decided that attempting to make the reels in the U.S. was fruitless. She felt that U.S. manufacturers could not (or would not) work with her on the specific product design she wanted. They also made the ordering process difficult. Angie says that the U.S. manufacturers “were limiting and difficult to work with.”

Now that Angie decided not to make the reels in the U.S., where was she going to manufacture them? She found it convenient to use Alibaba to locate and communicate with suppliers in China. “Alibaba.com Corporation is China's leading e-commerce company, operating the world's largest online marketplaces for both international and domestic China trade.”

Via Alibaba, Angie identified a reel manufacturer in Ningbo and a lip gloss manufacturer in Yiwu. She conducted some introductory meetings with them via email yet did not feel comfortable ordering from companies with whom she was not personally acquainted.

In her contacts with some Chinese suppliers Angie heard about the Canton Fair. Her Alibaba contacts indicated they would be attending. The Canton Fair is a very large tradeshow where Chinese manufacturers and international trade companies exhibit. Angie decided it was time to make the trip to China to meet her manufacturers of choice and perhaps alternate manufacturers at the Canton Fair. Angie planned a trip to Guangzhou. Arriving in China, she thought, “This is going to be an experience; I am meant to be here.”

There were over 100,000 exhibitors at the Canton Fair featuring a wide variety of products - from hair ties to huge stone monuments. Angie, who was accompanied by her mother on this trip, visited dozens of exhibitors. After the fair, Angie felt that China offered a tremendous opportunity to manufacture her product. Because she had originally researched manufacturing her product in the U.S., Angie noticed significant differences in U.S. and Chinese trade shows. Exhibitors in China were not hesitant to give pricing information on the spot, even for a custom item such as hers. Assisted by an interpreter, Angie was able to explain her idea and product and receive price quotes at the fair. Exhibitors seemed to be very interested in foreign attendees - and did not give much attention to locals. The exhibitors at the Canton Fair also dispelled any concern Angie had over who was going to be the actual manufacturer of her product. The Chinese exhibitors were, without doubt, the actual manufacturers, and they were willing to work with her to finalize her designs. Angie claims she “discovered a whole new world” in China. She says, “The Chinese are motivated, hard working people. You can see that they are eager to make deals and they want to succeed. They are also a pleasing culture and want to make their customers happy.”

After the Canton Fair, Angie and her mother traveled to Zheijiag where they met with their manufacturers of choice. Their first stop was a cosmetic factory located in Yiwu. Next it was on to Ningbo to meet the reel manufacturers. These personal contacts and visits to their facilities affirmed Angie’s decision to manufacture in China.

Angie describes China as her land of opportunity. The Chinese manufacturers provided her with the means to bring her product to market. Upon invitation to visit their manufacturing facilities, Angie was surprised to see that much of their equipment was hand-operated. She was expecting more sophisticated technology. She was told that “they cannot automate their production because so many of their people will have no jobs.” Regardless of their production process, Angie was assured the job would be accomplished.

With confidence and excitement, Angie completed her 10-day sojourn to China. She felt that she had attained the means to produce her product. “Since I returned from China, I look at life differently,” Angie says. “I feel like anything is possible. I have a better understanding of how things are made from scratch.” Angie could see her idea coming to life, moving from a drawing to a tangible product.