From comments on the piece on Temu and Shien, many people wrote of “quality” concerns. But let me tell you that we exaggerate “quality”. Indeed, as I explained in my thesis on a product Minimum Viable Quality (MVQ), we must be open when a new business model is emerging in the land. Quality without the considerations of price is a waste of time. Yes, comparing a hotel room you paid $20 with the one you paid $200 is not fair. Simply, you need to bound quality within the contexts of price and value.
Temu and Shien do not have quality problems since the customers are well aware that the prices those things are being sold could not have delivered the same value as alternatives which might cost 5x more. The real issue here is that Temu and Shien may not be doing well if not that the US has massive inflation which makes these platforms super attractive for those looking to extend their wallets.
For Temu and Shien, this is a business model: while there is a market for Amazon, there is one for those who may not need the quality you can find in Amazon products, but still have unmet needs. It is legal provided everything is disclosed. After all, we have markets for Mercedes Benz and Kia!
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From comments on the piece on Temu and Shien, many people wrote of “quality” concerns. But let me tell you that we exaggerate “quality”. Indeed, as I explained in my thesis on a product Minimum Viable Quality (MVQ), we must be open when a new business model is emerging in the… pic.twitter.com/shGovirlBY
— Ndubuisi Ekekwe (@ndekekwe) May 4, 2024
As I have written, MVQ is that version of a new product which allows a team to sell the maximum amount of products to customers with the least effort and at the best optimized price even when delivering value. Yes, see it as a term that refers to a product version that is good enough for its target audience. It is also a way of saying that the product has enough quality for its target audience and no more.
The fact is this: any product quality that does not correlate with cost (or value derivable) makes no sense. I have designed accelerometers (motion inertial sensors) where my employer gave me diverging product specification targets: one version was for $0.60, another for $260. The one for $0.60 was made for toys while the $260 was engineered for use in pacemakers (heart monitoring systems). In the cheap one, it was a very crappy product that was built to last for weeks. But in the expensive one, knowing a human life depends on it, it was designed never to fail with many redundancies and checks.
Without the cost context you can think that the cheap one was a poor job. It is indeed not a great quality product but that was by design. That is what the market for toys wants because the kids rarely use them for days before they are discarded. It is a mass market product which has to be affordable to make sense. That does not mean that you cannot make very expensive toys only few can afford. But what is the purpose? Put a $260 XL in a toy which would be dumped within days?
The deal is this: the construct of quality has no meaning until the price of the product is put into considerations. I always ask entrepreneurs to build for the Minimum Viable Quality (MVQ) bounded by the product target price which the market will respond to. You can build rockets to fly around the world: that is an engineering possibility. But does that make business sense if no one can afford it? Ask the makers of Concorde for answers.
Comment on Feed
Comment 1: Quality? That’s funny because what certain people don’t know and we that have been to China know is that Lui Kang in the factory making the Shein hoody is the brother of Chun LI in the factory next door making the hoody from Fashion Nova. The so called higher quality products are made in the same vicinity. Don’t let the branding fool you. Now it’s not all brands that are mass produced in China or Taiwan but some of the “high quality” products you put on a pedestal aren’t what you think they are.
My Response: Indeed, Apple is assembled in China also. It is about the pricing power.
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As long as what is stated is what is delivered, there may not be issue with regard to quality. It also means that there are poor people everywhere, whether it’s US, China, India, Nigeria or France, it’s a universal thing. So if we don’t build things at price points affordable to all classes of buyers, new markets will continue to emerge.
Inflation has unintended consequences of creating new markets, whether by innovation or necessity.