Friday, June 17, 2016

Fakes are better than the originals - Jack Ma

In this world of outsourcing, we were used to only outsourcing of services. But what can outsourcing of products do ? It can damage brands. But do brands matter ?
Kickstarting a debate on originals and fakes..
Fakes are not products inferior in quality, but they are products made by the outsourced manufacturing partner but without the branding.

There are two question of ethics here, is the outsourced factory carrying out unethical activities or is the company outsourcing the products to other manufacturers carrying unethical activities ?

Let us take an example of Apple and Foxconn to illustrate this ethical question better.
Apple does the design and outsources manufacturing to the Chinese company Foxconn to manufacture the products in China. Apple, is only designing the product, looking for the right vendors to buy parts from, to manufacture and marketing the complete product produced at a low cost by unknown vendors at exorbitant costs to innocent, gullible customers around the world. The customer buys the product thinking that the same superiority in design of the Apple product is ensured in its manufacture by Apple itself. Little do the customers know how they have been taken for a ride by Apple. The customers individually do not have power to challenge Apple for committing this breach of trust

Taking the other side of the outsourced company, Foxconn for instance here, it gets the design from Apple, has the manufacturing expertise to produce it in large numbers at good quality and low cost in China. Outside the agreement, if it tries to sell the same product, as a Foxconn or other branded product, rarely people would buy. This duplicate product is also of good quality, but may differ from the original Foxconn product (Apple) in a minor feature .. In this discussion Jack Ma refers to this as the duplicate product.

Both the original designer and the outsourced manufacturer are ethically in weak grounds, but both are able to reach the right customers at the right price.
If the customer does not mind buying Apple products manufactured not by Apple (thereby Apple committing a breach of trust placed by the customer on Apple) but by Foxconn in China at a high price and is comfortable with the thought, the customer also should not bother buying products of the same superior design of Apple at a lower cost ( again foxconn committing breach of trust placed by Apple on Foxconn).

Apple customers around the world are not aware of how Apple is breaching their rights to get original product manufactured by Apple in its manufacturing facilities and duping them in the process.

I am sure Jack Ma's statement will raise a debate on outsourcing manufacturing of products by major companies (breaching the trust placed by the customers on the companies). Jack Ma presently running the largest business organisation in the world overtaking Walmart a couple of months back, has every right to raise this issue and make the public aware on how they are being fooled by big organisations like Apple.


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