Shenzhen with benefits?

During my recent trip to Taiwan, I was struck by how similar China’s most famous electronics manufacturing hub, Shenzhen, has become to Taipei in terms of scale and costs.

stats

And yet Taipei is much more developed than Shenzhen, both in terms of its technology, infrastructure, environment and culture. Here are some statistics, anecdotal evidence and photos from Taipei that stood out from my trip.

  • Second highest GDP per capita in Asia, at $48,400. (Shenzhen’s is $24,336. For context, New York City’s is $57,329.)
  • Downtown, office-based factory setting

  • First class municipal infrastructure, mild car traffic, orderly subway

  • Natural surroundings (photos taken less than 15 miles from city center).

  • Amazing, affordable food

For someone who has spent a lot of time in Mainland China, it was hard not to see Taipei as a sort of “Shenzhen with benefits” (clean air, democracy, safe food, etc.) option for electronics sourcing. However, Shenzhen tends to attract more of my clients than Taipei.

The discrepancy in recent economic growth hints at one reason my customers’ projects still end up in Shenzhen rather than Taipei, despite the similar manufacturing costs and lack of “benefits”. My customers are working on new products, new companies or both, which represent high potential, high risk, “marginal” business to a factory. There is more appetite for marginal business in the growing market of Shenzhen than the mature market of Taipei. When I pitch a new customer and/or product development project to a factory in Taipei I mainly hear an explanation of the costs (risks) involved and what can’t be done. When I have the same conversation with a Shenzhen-based manufacturer, the emphasis of the conversation is on what can be done.

The receptiveness of Shenzhen’s factories to new electronics projects makes it much more appealing and accessible to entrepreneurs and product developers than Taipei. However, it is always worth exploring Taiwanese options when sourcing electronics because if you can find a receptive partner there are definitely benefits.

Questions, referrals, coffee?

I’d love to hear from you,

Joe

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