Business Ethics, Morality, National Pride...or Naivety?

Business Entrepreneurship
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This has been troubling me lately. For some reason, I feel like a bunch of random people might give me better advice than people around me. And in a way, this forum will probably be more biased to this question as it’s a Taiwan-based forum, but it’s also a place I think people will more understand where I’m coming from. Some of you might not even like me so making it more interesting to hear what you think.

I’m in the beauty industry, specifically for professional supplies. I don’t sell to the end user. I have made it a point to avoid doing business with China, specifically in items that are cosmetics in nature. For various reasons, well, we all know the Chinese don’t even trust their own products, from medicine to baby formula. Another is that I am Taiwanese-Amercian, and I see China as an enemy nation. I manufacture non-cosmetics in Vietnam and cosmetics in Korea and Italy (both cosmetic powerhouses)

Now I run into a dilemma. A new trend I’ve identified in cosmetics is coming out of China. I have tried to get the Koreans to manufacture it but better, but the price point is just too high to compete unless I sell it as a very high end product but this has it’s own difficulties. Italy…well, Europeans don’t want to do anything different.

I simply can not compete at the price point of China because too many logistics pieces required from different places can all be easily done in China, and China’s manufacturing is still cheaper than Korea’s.

One issue I face is I do not believe the majority of people care like I do about safety. As long as no one dies, they could care less if they can get it cheap and have a higher profit margin at their own salons and such. Some do, but I’ve come to believe like many of us, we are often hypocritical. The cosmetic industry is not as regulated (or at least enforced) as much as people think it is. Unless people get seriously injured, regulators rarely enforce anything or check.

Now am I just being naive on this issue with not manufacturing in China. I have taken great pride in not using cheap and possibly unsafe cosmetics in my business, so to suddenly come out with products from China could make me look hypocritical in the eyes of some clients who care. And I have made a lot of differentiation for westerners that Korea is not like China and Korean cosmetics are some of the most innovative in the world.

And the reality is, I still use things from China from my daily life such as the iPhone and what not. I tell my wealth manager to not have direct investments in Chinese firms but even I understand the economy is connected and there will always be some level of exposure to Chinese companies. And even the bottles I use, probably most are from China as they produce probably 90% of the bottles of these things.

What do you guys think? It’s not necessary this 1 item I’ve identified as a trend coming. It’s more that I am handicapping myself not doing direct business in cosmetics in one of the largest manufacturing countries in the world due to my reasons. I estimate maybe I am losing out 5-15% of potential revenue if this is my moral and business ethics.

Any thoughts?

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And I’m not justifying doing anything unethical but the cosmetics industry is kind of shady. I know from my own investigations and piecing things together from talking various suppliers and going to trade shows. Some of my competitors will say something is made in the UK by buying from a Chinese company who made a company in the UK but its manufactured in China. Things like that happen all the time.

Even as a Taiwanese tongues get loose when you speak Chinese to them identifying as a fellow countryman. I know so much shady stuff people do like put illegal ingredients in their products to work better on my competitors but I don’t want to go on that crusade.

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From a business perspective, buy from the cheapest supplier, maximise your revenue, that’s all that makes sense.

From a human perspective, you clearly have some strong values that have shaped the course of your life up to this point and now you are faced with an opportunity where it would appear you could profit from the erosion of some of those values. I’m not intentionally judging those values by any means in any of my wording.

It’s a tough decision but you have to do what is right for you, but my thoughts are… money is cheap compared to loss of pride and values.

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It’s your business, @Andrew0409 . You do what it takes to survive. You’ve started it from ground up, as some of us remember. You can’t fight the trend (producing in China) due to costs.
So, if me, I’d look to doing it in China, but maybe there’s a way for you to still say it’s MiT, if final processing is in Taiwan.
At the same time, I’d be looking now for other non-China countries to make your stuff. You said you like Vietnam, maybe target there after or at the same time you’re targeting doing it in China.
Business environment now changes too quickly. You better change, or you may suffer badly (loss of profit).
I would never look differently at you if you went to China. Just make sure they don’t steal your secret ingredients. :blush:

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I have no problem with people doing business with China.

However, as a customer, if you have tried to differenciate by not using Chinese manufacturers, changing now would make me question whether your products were ever really produced somewhere else.

Added to that, you have personally displayed some really strong views about China on Forumosa. Doing business there now seems quite hypocritical.

Like i say, doing business with China is 100 percent understandable, and i would in your position. But i am not as outspoken against China as you.

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This sounds like an acceptable trade-off. :+1:

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This seems like one of those questions that there’s no right answer to. Only you know what you want to do and what price you’ll pay, if it’s a quality product etc., and for that matter how your own customers will feel about it. I’d guess unless they have strong feelings about China themselves they’ll live with it. One thing, if Chinese sources are the best, it seems like bad business to compete with one hand tied behind your back.

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  • I once wasted at least ten hired programmer hours trying to figure out the Imgur API, cos I didn’t want to host pics on AWS. Amazon were mistreating their warehouse pickers back then. Now I might use Amazon wishlists, because they are the fastest way to eradicate certain aspects of poverty in SEA.

  • You could develop a framework to sell this to your customers. You could tell them, exactly what you told us, in bulletpoints, without any butter-talk or shady market speak. Which you seem admirably averse to.

  • Authenticity is a tangible force.

  • If you tell them its only product X that you’re getting from China, for reasons Y and Z… Then they will probably be alright with that. Admit plainly in the press release that you “know it might come of as hypocritical”… they will respect that.

  • Test it rigorously and show customers the results.

  • People in Shenzhen are only slightly different from ppl in HK.

  • Hypochlorous acid might be big in beauty in the future.

Your thread reminds me of this scene. (30 seconds)

Game of Thrones

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All too true.

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China is just such as huge producer of raw materials in any chemicals. Even the medicine we use often use chines supplies chains.

So it’s likely our manufacturers and any manufacturers using chemicals use some or all Chinese raw material.

But obviously the difference between producing chemicals and making them into a finish cosmetic product is different. It’s the reality that the world is all connected and China is a massive player.

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Indeed.

They are absolutely desperate right now for business. It’s tempting but I feel like I’ve made decisions to where I am and I can find ways to continue with them.

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