The Troubles of Buying a Counterfeit Water Purifier

"I'm going crazy! I just bought an A-brand ultrapure water system last month, and it broke down in less than two weeks! They came to repair it twice, and after much pleading, they finally got me to pay. Okay, now that they've taken the money, the equipment is malfunctioning again. I've called them countless times, and I haven't even seen them yet; they just hung up on me, and now they won't answer my calls! It's outrageous!" Exhausted, Professor Liu from the School of Bioengineering at a university arrived at Manager Wang's office at Xinyuan New Instruments Company and began complaining as soon as he sat down.

As a close friend and classmate from university, Manager Wang listened patiently to Professor Liu's rant. “I knew they were a newly established manufacturer at the time, but their sales staff were incredibly persuasive, claiming their prices were significantly lower than well-known products on the market. They even included all the after-sales terms I requested in the contract. Now, those terms seem like a rip-off. I don't know how to explain this to the director; that was the manufacturer I strongly recommended! What a failure!”

Manager Wang interjected, “Who told you not to listen to my advice? Didn't you contact the two manufacturers I recommended?”

“I did, but you recommended a branded ultrapure water machine, which was about 20% more expensive. I thought Brand A was cheaper, so I suggested the director buy Brand A; oh my god, the director might think I have some kind of business relationship with Brand A.” Teacher Liu took a deep drag on her cigarette, her expression full of worry.

“You deserve it. I’ve been in the instrument industry for five years,” Manager Wang said, glancing at Teacher Liu. “This industry is a mixed bag. When you asked me to help you buy something, because we’re friends, I recommended two brand-name products for you to buy directly. If you had purchased through our company, it would have cost extra—three to five thousand yuan more. I’m just an employee; the company won’t supply you at cost. If you weren’t my friend, hehe, I’d be happy to let the company buy you third-rate products. They’re better than your knock-off machine, though. Third-rate products are cheaper, but our profit margin is still good. The profit margin for those brand-name ultrapure water machines is very low.”

Teacher Liu looked regretful: “How was I supposed to know? Brand A said their product is exactly the same as the most well-known domestic brand on the market in terms of all components and manufacturing processes, and they even promised to include the after-sales terms I requested in the contract.”

"Do you believe it yourself? This is an internal report from an ultrapure water machine manufacturer that I got my hands on a while ago. Those counterfeit machines are basically 'underground factories' with business licenses." Manager Wang took a document from his desk drawer and handed it to Teacher Liu. "I thought you bought the brand-name product I recommended. Sigh, you don't really understand this market. Let me tell you a simple truth: as far as I know, the best manufacturers in this industry only have a net profit of 5-8% per year. And if you want to operate like a legitimate company in this industry, you have to sell more than 500 units a year to achieve that." The break-even point is crucial, but those counterfeit phone manufacturers only sell a hundred or so units a year. How can they guarantee product quality? They consider costs merely as the assembly cost after purchasing cheap components; after-sales service and technology are not their concerns. Otherwise, how would they make a profit?! They're lucky if they don't lose a fortune! Many startups enter the market with the mentality of making a quick buck and running. No matter how counterfeit phone manufacturers explain things to customers, they are essentially exploiting end-customers' lack of market knowledge to make a quick buck. You might not even know if the manufacturer is still around in a year or two…” Manager Wang glanced at the puzzled Mr. Liu and continued the previous topic: "The marketing model of counterfeit factories is based on low base salaries and high commissions. Essentially, there's a strong cooperative relationship between the manufacturers and sales staff. Salespeople obtain orders through various means or by making empty promises to customers, making after-sales service a mere formality. People often say that air conditioners are different from ordinary household appliances; it's 70% product quality and 30% installation. Ultrapure water machines are even more special than air conditioners. They not only require high-quality components but also crucial maintenance during use. Most manufacturers simply cannot support after-sales maintenance; their after-sales promises are merely verbal or 'written words' made to secure orders. End customers with a deep understanding of the industry wouldn't even consider equipment from third-rate manufacturers when buying ultrapure water machines, let alone counterfeit machines. However, the imitation of counterfeit machines makes it difficult for laypeople to discern their quality, fooling many end customers. Counterfeit machines lack their own R&D, are heavily plagiarized, and have long been involved in intellectual property infringement disputes with other brands..."