If you thought Shein and Temu were bad, wait until you see what’s next. The latest ecommerce export wave coming out of China is aiming higher, bigger and better. And it’s absolutely terrifying – or at least it should be – for those retailers in the U.S. who thought they were immune to the Chinese digital brands.

While some brands say they will consider opening U.S. factories, history has shown they will simply move production elsewhere into Asia or perhaps Mexico. What history has also suggested is that cheap, knock-off Chinese products aren’t going to go away.

Maybe you know, maybe you don’t know, but this new breed of internet-friendly brands – like Boox, Narwal and Laifen – are coming into the American market with upscale household goods and consumer electronics that are meant to challenge well-established names in the marketplace. And given how good Chinese companies have been at their earlier efforts, these new disrupters could only be the opening salvo in yet another trade imbroglio.

Chinese Imports in Three Easy Lessons

The history of goods from China can basically be summed up in three stages:

1. American and Western companies started sourcing products, previously made in their own countries, in China, attracted by cheap labor, suppliers eager to make them happy and an increasingly sophisticated and efficient supply chain.
2. Chinese factories, very quick studies in achieving scale, began to sell directly to U.S. importers, often bypassing manufacturers and going directly to retailers and even consumers.
3. Having learned their lessons well, Chinese companies started to sell under their own names, be it acquired brands like General Electric (Haier) and ThinkPad (Lenovo) or through their own labels like Shein and Temu, the latter of which concentrate on low-end fast fashion merchandise that benefits from favorable tariff rates and the consumer’s insatiable appetite for cheap chic.

And today, all three approaches are in full force with Chinese-made goods dominating the American market — no matter how they got here.

& Now for Something Completely Different

Now, there’s a fourth phase to the Chinese invasion. As Bloomberg business news service pointed out in a recent report, a new onslaught of companies is entering the picture with higher-level premium products, often costing hundreds of dollars – sometimes more – and targeting upscale categories the Chinese have largely stayed away from in the past.

“The difference between this generation of Chinese companies and the early-day exporters is that the current batch of firms are taking control of their own research and development, marketing and distribution functions,” Ray Hu, founder and managing partner of Shanghai-based Blue Lake Capital, a VC firm, told Bloomberg. And while the prices of these products may still be lower than comparable goods consumers are shopping for – despite the fact that some are made side-by-side in the same factories – they look every bit like Western brands without the ticky-tacky websites or language some of their predecessors had.

Upscale Tools

Take Laifen, for instance. They make hair dryers and electric toothbrushes, each of which bear more than a passing resemblance to products from Dyson and Philips, respectively. Their website is slick, complete with very American models, shipping is free, they have a frequent purchase program and customer service is through a “.com” suffix, not one ending in “.cn.” And while the “About Us” panel way, way down at the bottom of the page references the company’s founding in 2019 by “Hongxin Ye, a visionary creative geek,” that’s about the only way you’d know the possible Chinese origins of the brand…possible because who knows how many American tech startup companies have a back story featuring a Chinese founder.

Boox, which makes e-readers, says it has been doing so since 2009 though its entry in the U.S. marketplace seems to be significantly more recent. Its current line-up is quite extensive – we counted more than a dozen individual models – and many are priced comparatively or even slightly above competing products like Kindles and iPads. Shipping does not appear to be free, but Boox makes a point that it’s super-fast, prominently noting its U.S. warehouse distribution point. Curiously, in a reference that American consumers may not be used to seeing, the company notes that “When purchasing international products from BOOX, the seller of those products is Onyx International, a Chinese company and you are the importer of record. As the importer of record, you shall pay import duties, taxes, and fees when the products arrive in your country/region according to the local regulations.” We bet most U.S. shoppers will have absolutely no idea what that means and furthermore will be caught off guard with the surcharges. These references may veil the fact that some of these new Chinese brands are also selling to third parties in addition to direct-to consumer, Bloomberg notes. So, don’t be surprised to see these brands turn up in stores and on the websites of traditional Western sellers. Amazon, we’re talking to you, which already carries Boox and Laifen, among others.

Narwal, the third brand mentioned by Bloomberg, has been in business for eight years but has only been exporting into the U.S. for about a year. It makes robot vacs, competing with the market leader iRobot. Rather than lowballing prices, its products go for $1000-plus, right up there with the competition. It is banking on added value features like self-cleaning mop pads. And it seems to be working: Its T10 model just received the top grade from Consumer Reports, which doesn’t get hung up on country-of-origin matters. Ten percent of Narwal’s production is exported, the news service reports on the way to a projected 30 percent share.

Wave Hello 

This new wave represents the latest disruption to legacy suppliers, especially those selling lower-end goods — and even newer DTC sellers who thought they had a new twist on an old idea. All of whom thought they were immune to being disintermediated by China. “Global brands can expect heightened competition from Chinese brands,” Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, told Bloomberg. “Not just in cheap categories like in the past but in increasingly upscale ones.”

So, this is not the wave of the future: It’s already here. But there is one red flag hovering over all of this new commerce. It goes by the name of Donald Trump. He is campaigning to impose what he has said is a 100 percent across-the-board tariff on absolutely every single product from China that tries to come into the U.S. market. This is a radical extension of the policies he put in place as President, mandating lower and selective tariffs that only achieved shifting production out of China into Vietnam, India and other Asian countries. It didn’t return production to the U.S. as he said it would. And it increased the prices consumers paid.

Those tariffs continued under the Biden administration and have been folded into the overall inflationary spiral of the past few years, largely paid for by the consumer and not Chinese suppliers. Under a President Harris it’s still less clear what would happen to international duties, but one can assume that characterizing China as the big-bad-panda-bear is good politics and a popular stand. So, any of these newer brands will need to put workarounds in place to deal with whatever tariff policies are activated.

While some brands say they will consider opening U.S. factories, history has shown they will simply move production elsewhere into Asia or perhaps Mexico. What history has also suggested is that cheap, knock-off Chinese products aren’t going to go away. Yes, not every Chinese brand has found success in the American marketplace and not all of these newcomers will either. But enough will, which is why existing suppliers and retailers need to keep them on their radars and have a plan on how to compete against them. Proving once again that old adage: “It’s always something.”