Sourcing in China for Electronic Manufacturing: Should you buy components in Hua Qian Bei Shenzhen City China

I quite often hear that Shenzhen is the best city to source electronics products and electronic components. This is particularly highlighted by the fact that the Hua Qian Bei area located in Futian area is well known for its big electronic market. Many people say you can find everything related to electronic in this area.

In this article I am going to share the experience I have with Hua Qian Bei (HQB) and what I think about it. I will explain what you can buy there and what strategy you should have in mind when buying things in Hua Qian Bei. What you should do and what you should not. I hope this article will be usefull to you.

Where is located Hua Qian Bei

Hua Qian Bei is located in Shenzhen in south of China, in the Futian district, metro station Hua Qian Road or Hua Qian North. Recently the the main street of this area has become pedestrian so it is quite easy to access the main area. 10 years ago when I went in Hua Qian Road, the road was for car and it was sometimes difficult to circulate between building etc...

What can you find in Hua Qian Bei

Literrally you can find many things in Hua Qian Bei related to electronics and mostly related to consumer electronics: from the most simple components till the most advanced finished products such as smart phone, drone etc.... It is really like a supermarket dedicated to electronic and electronics products.

It is like a whole district full of electronics merchant. Like a giant supermarket for electronic, the district is well organized and mostly each building will have its product specialties. For example you will find full building specializing in :

• LED related products
• Mobile accessories : case, glass protection, cable etc...
• Mobile parts for replacement : screen display, PCBs, casing, batteries
• Computer accessories:  mouse, keyboard, etc...
• Computer parts: power supplies, hard drive, etc..
• Electronic components: resistors, capacitors, IC, memory etc...
• IP Camera
• Tablet
• MP3 / MP4 player etc..

I probably forget many products but if it fall in the electronics , then you can probably find it there.

Who are the sellers in Hua Qian Bei

There are mostly two types of sellers in Hua Qian Bei

A type shops

Those type of shops are representatives of factories

Those shops typically serve as show room being in city center to promote products which their factory manufacture far away from city center. Quite often, they have a small quantity of product in their shop and can serve you quickly with several pieces but if you want a large quantity then they will need to place order to their factory, then to ship the goods to their shop for you to pick them a few days later.

B type shops

Those type of shops are resellers. They are actually not attached to a factory but work with a network of factory or supplier. They have products in their showroom, and the sellers will tell you they have a factory on the back to support them but actually they don't.

Often, those B type shops will never give you access to the real manufacturers. This can be an issue for traceability purpose.

Who is it for

Hua Qian Bei is ideal if you want to buy electronic related product in small quantities or if you are a maker willing to prototype a new products (however I never do it and you will see why later below in this article).

Indeed, since everything can be found there, you can easily buy many things quickly by picking what you need in the same location area, it is like a supermarket. If you have a shop in your own country and need a very diverisfy range of product to place on your shelf, Hua Qian Bei will be perfect for you because you can pick some small quantities in many different shops located in Hua Qian Bei area, collect them quickly and consolidate your parcel for sending a small shipment. You can even buy one pieces or one unit of the product you are looking for and this is perfect for sample. Sure you will pay it a bit more than buying it from a factory but if you want to buy only a few pieces only, the factory will not sell to you anyway.

If you are a maker willing to develop a new product and a prototype, Hua Qian Bei might feel to be a good choice because you can find anything you need nearby. It is true you can find everything you need almost.

If you are someone who doesn't care the warranty of your product, then you can buy in Hua Qian Bei. Shop are closing and opening constantly, so the shop who issue you a warranty document may just close tomorrow.

You can buy products in Hua Qian Bei for its convenience if those purchases are not considered as critical. For example, you want to buy 10 or 20 drones to bring back in your luggage to sell on ebay, go ahead buy them in Hua Qian Bei.

Why I usually don't buy electronic components or parts in Hua Qian Bei

There are few reasons why I usually don't buy electronic components and electronic parts in Hua Qian Bei:

#1 Considering mass production, I need reliability and traceability in my supply chain

As I explained earlier, there are different type of sellers in Hua Qian Bei with different profile. For me, it is out of question to work with a type B shop because if I can not control the supply, then I increase risk of quality on the mass production. I would also increase risk on the supply capability too. In Hua Qian Bei there are many components which are not authentic or genuine: there is a wide market for fake components, second hand used chip, downgraded components (quite often for memory chip), and other chip which the packaging has been marked with a laser to make believe the chip is genuine whereas it is not.

A typical trick is to sell some components which are downgraded on their life cycle. A simple example: flash memory from Samsung or Toshiba are supposed to pass a very strict quality control at Samsung factory. A typical one is the cycle time of a chip: example 1 billions cycle use for write and read. When the chips do so they are labelled with Samsung or Toshiba brand on the chip packaging.

There are always some defectives on a production and flash memory are not an exception on it. When a chip doesn't pass a test such as being able to run 1 billions cycle to write and read but can run 0.1 billions cycle, do you think that Samsung or Toshiba scrap them ? No, they don't. Instead they sell this chip without their name on it on a parallel channel at cheaper price that they would do if the chip was labelled with their brand name on it. Guess what, those chip are sold in Hua Qian Bei, some people buy those chips which don't have any marking on their packaging. They use a laser engraving machine and engrave Toshiba or Samsung characted on it. Then they resell those chips as Samsung or Toshiba. You buy it, it works 0.1 billions time instead of 1 billions, and guess what if thise chip is used in a flash drive, you will use all your data on it after several months. If it is use on a tablet, your table will not boot up anymore after several months.

I took as example a flash memory, but it is the same for some other ICs such as amplifier which work for several months then suddenly don't work any more. Same for some components such as capacitor etc.. which are supposed to be fault tolerant to a certain voltage or temperature but which actually don't...

On a mass production order, you can not afford to take the risk to ruin a full mass production order due to a single unreliable components on your circuit which you purchased from an unreliable source. Don't get me wrong, there are also some honest vendors there being accredited reseller by their components manufacturer but to find them and make sure they will always deliver what they promise... good luck.

#2 I need the same components source on product development and on manufacturing

When you develop a new electronic product, it takes already some time to establish the architecture, to select components, to test, to fine tune, to correct and to validate your system. If you start developping a product with some components that you found in a little shop in Hua Qian Bei and later you want to turn to mass production using the same components, how can you insure that your supply chain is secure just relying on a single vendor....

Have you double checked this shop is a type A shop ? If it is not, what is the risk this shop change its source from order 1 to order 2... you will pay for this mistake during mass production. What if this shop disappear...will you need restart all your design phase because you can not find anymore the component you need for your mass production...

What if you find out later on that the component you used is not an original but a copy, which doesn't react exactly as the original would do... your system or circuit may not react the same way later on.

You can not swap components easily without increasing risks to get a product which will not act as it used to act when you were prototyping with the components you found in the small shop.

So if you start prototyping and developing a product using a base which is not stable and reliable already (the components), what is the risk you are taking regarding mass production ? Imagine, you start prototyping using a component A, everything goes fine. Once you have validated everyrhing, made your product being certified, you need to launch mass production. You may find out that:

• The small shop doesn't exist anymore
• You have no control on the supply chain and traceability of your components (so you can only rely on the trust you have on your small shop vendor), the vendor may swap components without letting you know
• The vendor can not supply in large quantity enough
• The component is not reliable enough because fake
• The vendor propose you an equivalent

Oups.... you will need to come back again on the design phase to validate everything again....

For all those reasons, I don't buy components in Hua Qian Bei for mass production even they seems easy to find. I buy even less critical components there. I don't buy them either for development phase because I don't see myself validating twice the same product due to a component swap. If I buy components there, I only buy them at accredited reseller or distributor who will never swap components. Some of them (very few) have shop in Hua Qian Bei and it is ok to buy from them but they absolutely have to be an accredited distributor only and I will need a proof that those components are really from the original manufacturer (ideally a Certificate Of Conformity).

Still willing to buy in Hua Qian Bei ? Here are a few tricks

• Buy only to shop A type: by doing so, you potentially eradicate the traceability issue
• Buy components only to accredited reseller

Conclusion

Hua Qian Bei is ok to buy electronics goods or components only for small quantities: you need a resistor to fix you old TV, you can buy there. You need electronics gifs for your children coming back from China, you can buy there. You have shops in your country and are willing to test a wide range of product to put on your shelf, you can buy there.

However, if you are developping a new product which you plan to manufacture on a large scale later, don't rely on Hua Qian Bei to source your components and other parts. You can use Hua Qian Bei to fetch some parts categories, to touch and test quickly, but don't rely on them for mass production if those parts are critical to your product.