Made in China: the risks of buying cheaper tech

Source: Vsoftsystems, 12/10/2018

Is there any sound reason not to trust low cost Chinese hardware imports?
China is known as the world`s factory, but would you buy direct from
the factory floor? While global firms such as Apple and Samsung spend
millions on branding and pride themselves on innovation and quality,
upstart Chinese manufacturers are undercutting them on price, offering
tempting bargains that often look similar to the big brands` gear.
`Previously, buying something from China would have been a total
gamble,` said Dr Jagjit Singh Srai, head of the Centre for
International Manufacturing at the University of Cambridge. `But now
you have websites where you have more confidence, with operators such
as Alibaba having their own rating systems, which means buyers can see
how satisfied previous customers have been.
`You end up having electronic confidence and you can start to make a
decision from that, which is a new phenomenon,` Srai explained.
The bottom line on buying from the Far East is the bottom line. In
comparison to the prices paid in mainstream outlets for big-name
manufacturers, the technology is temptingly cheap. At the time of
writing, GearBest was offering a Xiaomi Notebook Air 13.3 �` visually,
a MacBook Air clone �` running Windows 10 with 4GB of RAM, an Intel
Core i5-7200U processor and a 256GB SSD drive for £578.
By contrast, a MacBook Air with similar headline specs was listed at
£1,099 at Curry`s, while an HP Envy with a similar spec costs £899 �`
although it`s hard to know how the quality of the components compares
with the Chinese equivalent.
Are these cut-price exports worth the risk? After all, the vast
majority of the big brand items roll out of Chinese factories �` in
some cases, off the very same production line. Is there anything other
than a fear of dealing with remote, foreign companies holding us back?
Quality concerns
It`s impossible to make blanket claims about the quality of unbranded
hardware coming out of China via sites such as GeekBuying, AliExpress,
GearBest and Banggood. What is clear, however, is that at least some
of the little-known companies on those sites are intending to build a
reputation with machines that match the quality of better-known rivals.
`Remember that Lenovo was like those small brands a few years ago,`
said Professor Rajkumar Roy, director of manufacturing at Cranfield
University. `What you see today as a small brand could be a big brand
in five years` time �` that`s how all of them started.`
Meanwhile, other manufacturers are willing to cut corners, using
components of dubious quality or provenance. Machines may look
identical to a MacBook on the website, but only when you actually hold
them in your hands do you discover the creaking plastic chassis, the
last-generation components or the bleached-out screen.
Trading Standards and other bodies warn about buying Chinese imports �`
particularly for chargers, insisting they lack important safety
certification and could be dangerous. Yet, while it`s easy to question
the quality of products from cheaper brands, it`s worth noting that
the highest-profile crisis in recent years came from one of the
biggest brands. `If you look at the things that hit the headlines �`
batteries �` it was Samsung that had the worst issue recently, so it
hits the big brands equally,` said Srai.
PC and component manufacturing has become so commoditised that the
same factories could be building systems for the largest brands one
week and white-label startups the next. `Companies like Flextronics
and Foxconn are the major manufacturers in the world with a huge
market share,` said Srai.
`Contract manufacturing is huge,` he continued. `The products you buy
�` the high-end brands and the low-end brands �` could come out of the
same manufacturing stable, and the assembly of products has been so
commoditised that the only differentials are the components and the
brands.
`Some will have more dedicated contract management, so they are better
able to control the quality �` but some white labels may have quality
that`s as good as named suppliers.`
Will my kit work in the UK?
PCs from China should work anywhere (assuming that they`re shipped
with the right power supply), but the same can`t be said for
smartphones. Different countries and networks use different
frequencies, which not all handsets accommodate, and phones must be
approved by networks before you can be sure they will work.
`Some phones won`t work in Europe so it`s important to know whether a
handset has been certified by networks or not,` explained Francisco
Jeronimo, research director for European mobile devices with US-based
analyst company IDC. `Even if the device is cheaper, what`s the point
if you`re not sure it will work on the network?
`The white-label handsets don`t have proper distributors. Xiaomi is
having more success as it`s a well-known brand where many have bought
them via websites, and not through the channel, but otherwise people
don`t seem to make second purchases,` said Jeronimo.
Not only could the hardware be incompatible, but the phones may also
be designed for the Chinese market, making them hard to set up. There
have been numerous complaints because certain Huawei and Xiaomi
handsets don`t come with Google Play installed, which is a major
weakness. Although there are workarounds, these may require you to
decipher Mandarin menus.
Another key consideration is whether a product is allowed in the UK.
For example, mobile signal boosters are commonly available from
Chinese websites, but they`re currently illegal in the UK and could be
seized by customs officials on their way to you.
Consumer rights
The biggest argument against buying from China is the lack of consumer
protection and customer service that you would expect in the UK. The
European Union (and, therefore, the UK) has strict laws laying out how
companies should treat customers, providing warranty security, as well
as a 14-day cooling off period.
Most of the main Chinese retailers provide a warranty, but without
statutory rights in place they are under no obligation to provide a
repair, refund or replacement. `If you are buying things online from
outside the EU, you should be aware that dealing with a problem with a
trader thousands of miles away is likely to be more difficult than in
the UK, not least because of the language barriers,` said a Which?
Spokesperson.
`You do not have the protection of EU law. Goods could be unsafe and
consumers will probably find it almost impossible to get any money
back, as the purchase is not covered by the Consumer Rights Act.`
Even where sites do provide warranties, many wouldn`t pass muster in
the UK, because they offer insufficient protection. GeekBuying, for
instance, expects consumers to pay round-trip shipping costs for any
items that fail after six months and customers only have two days to
spot a fault after a product has been delivered. `For items that need
to be refunded or replaced, there will be a restocking fee if it is
over two days upon receipt of goods,` explains the GeekBuying website.
`Also if there is any scratch or damage to the item, we will charge
the damage fee.`
Even if consumer law offers little protection against dodgy dealers,
there`s still potential to recoup money if you use a credit card. `Use
a credit card on purchases over £100 and a debit card for purchases
under £100 for greater protection under Section 75 of the Consumer
Credit Act 1974,` Which? told us. `But it must be the person with
credit agreement that makes the purchase, not an additional card
holder.` www.vsoftsystems.co.za
PayPal can also arbitrate and possibly claw money back from the
company if things go wrong, but using the payment service means you
lose your Section 75 consumer credit protection.
Customs costs
Depending on what you`re buying, you are likely to be liable for taxes
and potentially import duty when buying items from outside the EU.
Goods that cost more than £15 will incur VAT of 20%, which could put a
dent in savings made buying abroad.
Anecdotally, we`ve heard that parcels that are not sent by express
services are less likely to be stopped and levied, but buyers should
budget for VAT.
Many tech products are not liable for import duty and, according to an
HMRC spokesperson, `smartphones, tablets and PCs are subject to a zero
rate of customs duty when imported into the EU, but VAT remains at
standard rate in the UK`.
People buying other tech products may, however, be stung for duty at
2.5% or more, and HMRC advises phoning its helpline (0300 200 3700) to
check duty rates.
Your package will also be held by the courier until you pay both the
tax and an often very high handling fee. Parcelforce, for example,
charges a minimum of £11.25 for the privilege of collecting the VAT on
HMRC`s behalf before agreeing to deliver a parcel �` a service for
which it`s already been paid. Parcelforce justifies the extra charge
by saying that it helps `cover the cost of additional handling,
administration, collection of monies and provision of facilities for
customs clearance of packages`.
Only once you have paid both taxman and courier will the goods be
released. On top of additional charges, there`s also the possibility
that tech items passing through customs could be similar enough to
branded products be viewed as counterfeits by customs officials. That
might even result in them being destroyed. Under EU law, officials
said, `fakes for personal use are exempt if carried as luggage when
entering the zone, but purchases bought online are not`.
Delivery and postage
In the age of Amazon Prime, the idea of waiting weeks for something to
arrive is antediluvian �` but Chinese retailers don`t have a warehouse
in Reading waiting to put goods in the back of a van. AliExpress, for
example, says its free delivery option with China Post Air Mail will
take 15-26 days, while GeekBuying takes 20-30 working days, after a
three-day processing delay. GearBest says the average UK shipping time
is 19.2 days, but admits that 6% of deliveries on its base rate option
take between 31 and 45 days.
While some goods have free delivery if you`re prepared to wait, there
can be steep charges for other items or speedier shipping. A laptop
from GeekBuying, for example, cost $45 for 15-25 business day
shipping, while the three-to-five day service from HK-DHL cost $50. A
similar parcel from GearBest was free for its 11-22 day service, while
the 15-25 day fee was €9.53, but the company recommends buying
insurance, which `guarantees your shipment` at €19.91.
If there is a problem with a delivery �` such as it being dead on
arrival �` the process becomes glacial. Most Chinese stores won`t offer
a refund or ship a replacement device until the original has been
received back in their warehouse, leaving the customer to pay the
postage and hope to claim it back. The companies will only pay the
returns postage for the cheapest tracked method, meaning the return
could take weeks. On top of that, carriers often won`t ship lithium
batteries due to restrictions, making certain products nigh-on
impossible to return.www.vsoftsystesm.co.za
Exchange rate racket
Then there`s the problem of dealing in a foreign currency. Sites in
China usually bill in US dollars, and although you can pay with
sterling credit cards, they can incur charges �` either through a poor
exchange rate or transaction fees.
`[AliExpress] lets you choose to pay in US dollars or pounds,`
explained a spokesperson for advice�`site Money Saving Expert.
`However, paying in pounds means AliExpress is doing the conversion,
and rates are poorer than you can get on some cards.
`We analysed the price of ten products in dollars and pounds and found
AliExpress adds an average 2% fee when you pay in pounds.`
The best currency to pick depends on your card`s charges. According to
the site, most debit and credit card companies get a good exchange
rate from Mastercard or Visa, `but then add around 3% in a
`non-sterling exchange fee`, so £100 of US dollars costs you £103`.
In the grand scheme of things, it makes little difference, but 3% on
top of VAT and delivery narrows the gap between sites in China and
those in the UK. Combined with the lack of consumer protection and
question marks over the quality of some kit, the idea of bargains
galore in China looks less convincing.