Despite the country manufacturing the vast majority of products for respected international brands and also having a large number of its own brands which can hold their own, few things are quicker to draw the scorn and chase away customers than those three seemingly innocent words: made in China. The only thing that can counteract this counterproductive customer reaction is a prominent name brand. Unfortunately the most unscrupulous of Chinese manufacturers discovered this a long time ago and started hastily slapping markings and logos of respected brands onto their products.
Stating that generic Chinese products have a poor reputation is a gross understatement but every now and then you are pleasantly surprised to find a diamond in all this dirt. Over the years, companies both in and outside Zimbabwe have discovered that they can build brands from the ground up around the best of these products. Many Chinese manufacturers, many of whom cannot be bothered to use anything more than subpar Google translations to convert their labelling for an English speaking market, are always more than happy to oblige.
This has resulted in a steadily growing variety of Chinese products being imported with local brand names, some of them in vernacular. Some of these local companies have even allowed their marketing departments to go wild with several openly describing themselves as manufacturers of products, some of which are a decade beyond the capabilities of even the best of our factories to put together.
Nevertheless, there is still no reason to scoff at these local companies as they are using a perfectly commonplace practice which is almost as old as mass production itself. These products are called white-label products possibly as an analogy to the blank label which allows one to write their own labelling. Let us investigate the various advantages offered by this practice in Africa.
You can have higher markups
By running such a business you are still effectively an importer like dozens of others who are moving merchandise into the country be it legally or otherwise. The only difference is that you can import the same product as these other businesses at essentially the same cost and still be able to add a much higher markup.
Once you have branded your imports with your own markings your product is already set apart from the other generics imported by your multitude of competitors. Compare the higher prices which you can charge with those of your competitors who are burdened by customer expectations: they will always expect the cheapest of products. Branding allows you to even raise your prices to amounts comparable to those of brand name products but you have to be sure that the quality of what you are selling can justify this.
It opens up reexporting opportunities
Some people underestimate the power of branding or marketing in general and are ignorant of the fact that it can be viewed as value addition in its own right. That is why several countries which do not even have a single phone manufacturing factory are exporting millions dollars worth of the devices every year to their neighbours (and confusing the custodians of trade agreements in the process).
That is one way in which some enterprising individuals are contributing to their country’s GDPs through an industry that historically does the opposite (it is effectively retail after all).
It allows companies to build brands before they have manufacturing capabilities
Building manufacturing companies is not reserved for engineers and their tech-savvy kin. Sometimes people who are more business savvy than anything else may wish to venture into the manufacturing industry. They can build a brand in advance by temporarily embracing white labelled products. In this way, they are giving their brand a headstart while they are developing enough of their own manufacturing capacity.
You have more customer loyalty than ordinary importers
Most retailers which import their generic products from China do their best to distance themselves from their wares once they leave the counter. The almost universally poor after-sales service of these stores ensures that it is not only their generic products which are forgettable (no matter how excellent they are) but the sellers as well. This means that customer loyalty is virtually nonexistent. Compare this with a company which takes time to build an actual brand name which is more likely to develop a loyal following if its products allow it.
You take a big bite out of the import market
By building a brand with a loyal following you can succeed in shoving some of the generic products out of the market if you try hard enough. This would entail that in addition to branding you pass on the low prices that are typical of Chinese imports on to the final consumer. Competing on pricing with the perpetually mistrusted generics is an easy win. This would also mean that your company is singlehandedly destroying the lucrative force of importing competing generics and your competition along with it.
I now leave you a little bit more sceptical and wondering which of your favourite ‘Made in Zimbabwe’ products are being honest with you. Those of you who are always on the lookout for ideas may also be eyeing new opportunities in “manufacturing “. Good luck either way.