The China Price by Alexandra Harney
Though I’m only 50 pages in, The China Price by former Financial Times writer Alexandra Harney, is a fascinating read. Among the myriads of articles about recalls due to toxic chemicals found within toothpaste to plastic toys, this book rather delves upon the inner workings of the Chinese manufacturing industry, more particularly in the booming southern region of Guangzhou.
The duality of keeping demands high and prices low have cost many Chinese manufacturing companies to break laws with little supervision, extend working hours, and create shadow (non-monitored) factories with the “five star” factory (for show for auditors). The irony of the name “The China Price” has a double connotation that we know China’s price for goods are very low and also the price that Chinese workers, mostly migrants from other provinces, pay in order to earn more money.
See today’s article in the NY Times about Chinese economy slowing down
When it comes to Chinese mentality, I perfectly understand their work ethic as to why they would be willing to work 80-90hr work weeks and get paid for very little. Chinese mentality is nothing like North American mentality where we fear of being taken advantage of if we work really long hours and are not compensated for our extra work. Instead, many migrant Chinese workers come from the country in poorer districts thus they have no choice but to work and care about money. According to the book, one factory manager says that if they do not give more hours to their workers, they complain. They would ask him what are they to do with their extra time? Sit on their bum? They’d rather work. Much of the money they earn is sent back to their families, which isn’t much different from many foreign students or workers who work in North America and send a good chunk of it to the families they’ve left behind.
The reality is that large companies place ridiculously large orders, expect factories to abide by labor laws, limit working hours between 8-10hrs, and expect the goods to be delivered in a timely fashion. Thus many manufacturers create “shadow factories” which aren’t monitored by their clients in order to meet their demands. The worst is that if these manufacturers only abide by the rules, they would lose business to other competitors and thus will be force to close and fire thousands of workers.
It’s come to the point as to what possible solution can there be to solve the large orders, keeping prices relatively low and still make a profit legally? If migrant workers are put out of a job, how will they be able to earn money? Let’s not even talk about work conditions as we all know the majority are held in poor conditions.
Low pricing affects our daily lives. Our Dollarama’s and IKEAs wouldn’t exist without the China Price. If the world would suddenly just buy locally (which probably will never happen), that means millions of jobs in the Chinese market will be lost. The economic turmoil will be beyond our wildest imagination. So how can foreign and local Chinese governments find a solution and common ground? And how can they prevent other third world countries from following the same disastrous footsteps? Keep in mind that even countries like Africa face the same dilemma, only their end is more on agriculture (see Stuffed and Starved by Raj Patel).
It is indeed a race to the price of zero.
Can we really survive without our cheap goods? Made in China just took on a whole new dimension.
Buying In, Trading Up, it’s all Freakonomics
Reading business and marketing books are perhaps the last things I had envisioned myself being interested in if you had asked me a year ago. And now, I can’t get enough of them. Once you’re sucked into the ongoing realities of the business and marketing industry, it’s hard to pull away.
Buying In: The Secret Dialogue Between What We Buy and Who We Are
By Rob Walker
This is an absolutely fantastic book on the new evolution of marketing, or as Rob Walker calls “murketing”, where traditional advertising and methods no longer work on our technology savvy consumers. He touches upon numerous examples to explain why and sometimes how we buy certain products. Can anyone think of a reason why Red Bull exists? Or why you bought it in the first place? Or, more importantly, who is Red Bull targeting exactly?
Marketers are continually finding ways to innovate and infiltrate us, showing up at our hangouts, giving out freebies at the water park, to get us to buy new products.
Trading Up: Why Consumers Want New Luxury Goods And How Companies Create Them
By Michael J. Silverstein, Neil Fiske, John Butman
How can you imagine a world without Victoria’s Secret, Callaway golf clubs, Mondavi wine, or the ultra slick BMW car? Well there was a time where the market for all of these industries was flat and uninteresting. This is a book that explores how some of the most recognized lifestyle brands have achieved success by offering consumers a better quality product at premium prices. Trading Up is a natural progression, people like new things, and even better when they outperform the old stuff. By personal experience, I would say Japanese 7Eleven trumps our dépanneurs by a longshot, yet the corner store concept isn’t anything new. But if you give consumers a distinctive advantage in better products and service, they will definitely flock to a 7Eleven store than your Couche Tard any day.
Trading Up is a good book to read if you want to find out how some brand names have made it, and can definitely help budding business entrepreneurs get into the mix.
Freakonomics : A rogue economist explores the hidden side to everything
By Steven D. Levitt and Stephen J. Dubner
Here’s a book that doesn’t have much relations to fashion itself, but nonetheless finds an interesting link between what we perceive a certain situation or event to be rather than what really happens. Such as there’s a strong link between abortions and the fall of rate crimes, or how drug dealers and their gangs operate much like legitimate businesses and that violence drives away the customers. So eventhough the media may report or explain things that make a lot of sense, often times they’re really just deducing what seems logical rather than looking outside of the box for another kind of cause.
If Freakonomics can be applied to today’s fashion industry, we can trace back all trends to specific subcultures, no matter how minute, that trickles down to the stores you shop in and into your closet, even if you’re not particularly aware of the numerous influence and years of innovation it took to have that specific piece of clothing on your back.
More Fashion Books To Read
Ever since picking up “The End of Fashion” a couple of months ago, I’ve been on a reading frenzy and making regular trips to the library, namely La Grande Bibliotheque on St-Denis and De Maisonneuve. As you know I’m always a girl ready to experiment and open my mind to things (coupled with a voracious appetite for news articles).
With the help of trusty old Amazon.com, I’ve picked up a few more books I intend on reading. For Montrealers, check the online listings at the library before buying them, it’ll save you money!
Read
“Deluxe: How Luxury Lost Its Luster” by Dana Thomas, published in 2007. This is probably old news that entire fashion industry probably read by now. I still recommend reading it 
Currently Reading
“The Cult of The Luxury Brand” by Radha Chadha and Paul Husband, published in 2007. A look inside the booming luxury industry in Asia.
“Trading Up” by Michael J. Silverstein, 2005 edition. This book focuses on American consumers on luxury goods.
“The Emperor of Scent” by Chandler Burr, published in 2002. Burr is a reknown author of several other books referring to the perfume industry, most recently he published “The Perfect Scent” in January 2008, he tagged along how Sarah Jessica Parker came up with Lovely.
“Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich” by Robert Frank, published in 2007. This has nothing to do with fashion, but so far it’s quite an entertaining book on the lives of the upper crust of American society. The concept is fun and lots of facts and figures are thrown in to give you how removed the rich have become from normal society.
A Fashion Book for Smart People
This book should be a lesson to everyone. In fact, I think it should be mandatory for anyone with a serious interest in fashion to read this amazing book that I gobbled up in a mere 3 days.
“The End of Fashion,” written by veteran Wall Street Journal reporter Teri Agins, feels like the equivalent of 100 NY Times or Wall Street Journal articles. Journeying through several examples of popular fashion designers, she shows an evolution in the business of fashion up until the very end of the 1990s. From the flamboyant Isaac Mizrahi to the brutally honest persona of Zoran, she details in great lengths of the struggles of fashion businesses throughout the last 20 years.
Establishing a fashion brand is more than crafting designs. In today’s standards, you have to be as much as a savvy salesman with great marketing skills in order to break even in the industry. Fashion magazines will rarely give you a look of the other side of the moon. Should you wish to further expand your knowledge on fashion, pay attention to the business section of your newspaper, you might find some interesting tidbits.
What I loved about this book are some of the spectacular failures and shortcomings of powerhouses who thought they would be unstoppable.
