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Purchasing brand name electronics

by Mike Bellamy

We are planning to attend the electronic fair in Hong Kong as well as the Canton fair in April. We are interested in consumer electronics by brand names and are wondering if these shows are worthwhile attending for these purposes.

That depends on the brand names you are after. If you are looking for Chinese brands, yes, you will find them at the trade shows for sure. If you hope to get a western/ Japanese brand direct from China manufacturer of that brand…well that is very hard to do. Here is why:

We are indeed interested in brand name cameras like Nikon, Panasonic, Samsung etc. I have spoken to employees of local wholesalers in the US who know for a fact that some of their merchandise, legitimate brand name cameras and tablets are shipped from Hong Kong. It seems like there is a worldwide trade of these goods and, of course one has to do his or her due diligence to make sure they are buying from a reliable source. I understand that there is a large center for electronics in Shenzhen called Huaqiangbei Commercial Street. You probably know this place.  We appreciate your help and guidance and will keep in touch.

If you have any information regarding this subject please keep us informed.

No question that these famous brand products are made in Asia and ship to wholesalers, retailers and even consumers in US direct from China. The problem is that exclusivity of the brand is tightly controlled. For example, a single unit of iPad ships from China factory direct to Apple customer. But you and I cannot knock on the factory door in China and ask to buy direct from factory in bulk, or any size for that matter. Details here.

BUT, you are right about HK being a hot spot for these products. The reason is the sales tax. HK wants to be a shopping destination, so not as much tax is applied as product moves from factory to wholesale to retail.

BUT, sales tax is pretty low in USA too. Even before you add in the shipping, the cost of the same famous brand camera in USA is about the same as in HK. When you get to HK, you will see Americans and Europeans buying 1 or 2 items for personal use. But the Mainland Chinese, Africans, Indians and Mideast people are buying dozens of units at a pop. The reason is that their sales taxes back home are higher than USA, so it makes sense to buy in HK. Walk by any Indian airline at the HK airport and you will see “commercial mules” each with a large flat screen TV and pockets full of electronics. But you do not see that on the flights to USA.

I write this not to rain on your idea about coming to China, but I want you to have realistic expectations. As you mention, Huaqiangbei is a great place to get electronics in Shenzhen … if you are buying local brands. But Shenzhen people go to HK to buy international brands if they want a deal.  A Japanese camera at Huaqiangbei is more or less same price as any big box retailer back home in USA. The opportunity, in my opinion, is to buy high quality Chinese brands and re-package them under your own brand at a markup. We have plenty of clients doing that, but no clients buying major US/Japan brands at factory/wholesale/retail level in China/HK for export (expect the few Africans and Mideast clients we help out).

Let me know how things work out for you. Hope my notes help.

Question answered by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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