Reorient Thursday April 27, 2006, 7 comments

A friend pointed out to me an interesting post on Design Observer. More than just interesting, in fact. Positively fascinating.

The author may have missed one fundamental point about the knockoff trade. Its not that Crust toothpaste and its packaging is being produced in a factory somewhere, it’s that Crust toothpaste and its packaging are being produced in the same factory as Crest toothpaste. Further, Proctor & Gamble, by choosing to have its product fabricated in China, has bankrolled both the production costs and the marketing of the knockoff product.

One of the reasons it is cheaper to produce things in China is because American factories are accountable to their client for intellectual property violations. As with all apparent mysteries, one need only follow the money to be able to separate the fact and the fiction.

The chinese factory that charges 1/10th of the price of an American (or Canadian) factory makes up the other 9/10ths selling trade secrets to Chinese national companies which then produce the exact same product with a fraction of the development cost. Because the Chinese national company has a head start in the positively massive chinese market over the American competitor, the Chinese national makes much more money selling the knockoff product than the original company ever will.

The American company wins, increasing its short-term profits. The Chinese factory wins, making much more money doing building something they were building anyway. The Chinese national wins, having a leading-edge product without having to pay research and development costs for its product, instead funneling those funds into different and better research. The Chinese people win, getting to support local businesses at a fraction of the cost without sacrificing on the product.

China has learned well from the west. Who would ever have guessed that toothpaste and hubris would taste so much alike.


Comments

Jorge Thursday April 27, 2006


You can change your link now.
Thanks for coming by.

:)

As for your article…

Hubris toothpaste does not sound like a good name for toothpaste. ;)

Adrian Thursday April 27, 2006


Link changed. You’ll be happier off of the MSN space, I promise.

Jorge Tuesday May 2, 2006


I changed my link again.

Because I am difficult.

Adrian Tuesday May 2, 2006


And I fixed it again, because I am good.

Jorge Wednesday May 3, 2006


You are, you are!

This is why I keep you around.

Adrian Wednesday May 3, 2006


It’s good to feel needed.

chris Wednesday May 3, 2006


so is it supposed to be wordpress or blogspot? i’m so confused!
~c

Commenting has ended for this post, but I'd still love to hear from you.

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