• info@chinadetective.xyz
  • Red Star's Private Detective Investigation Services cover all provinces and cities in mainland China.

Checking Out a Chinese Supplier for a Canadian Company Cases from Red Star Detective

Checking Out a Chinese Supplier for a Canadian Company Cases from Red Star Detective

Checking Out a Chinese Supplier for a Canadian Company Cases from Red Star Detective

Project description:

 

Summary:

A Canadian company sought a Chinese supplier for a variety of products and engaged with a Shanghai-based company that claimed to have a long and successful history. The Chinese company provided impressive details, including registration with the Chinese government for 15 years, substantial capital, high sales figures, and international clients. However, the Canadian company had concerns and contacted the Red Star Detective Agency in Shenzhen to investigate further. The detectives discovered discrepancies in the Shanghai company’s claims. Upon visiting the company, they found fewer employees and limited product capabilities, along with inconsistencies in certifications. Based on these findings, the Canadian company decided not to proceed with the Shanghai company as its supplier.

Key Highlights:

  • The Canadian company engaged with a Shanghai-based Chinese supplier that presented itself as well-established and successful.
  • The Red Star Detectives found discrepancies in the supplier’s claims, revealing a shorter history, smaller capital, and lower sales figures.
  • Upon visiting the supplier, they discovered fewer employees and limited product capabilities.
  • The Canadian company chose not to work with the supplier, avoiding potential risks and financial losses.
  • The case underscores the importance of thorough due diligence when dealing with Chinese suppliers, as many may exaggerate their success, potentially leading to unfavorable business deals. Personal visits and fact-checking are crucial before forming business partnerships.
Checking Out a Chinese Supplier for a Canadian Company Cases from Red Star Detective

Case details:

A Canadian company wanted to buy a bunch of products from China and was searching for a Chinese supplier that had a lot of different products and could deliver them in big quantities. After looking at a few options, they started talking to a Chinese company based in Shanghai. This company told them that it was a real business registered with the Chinese government for 15 years, had 80 million RMB as registered capital, and more than 500 employees after growing for over a decade. They also claimed to make 400-500 million RMB in sales each year and had over 100 clients in places like Europe, America, and Southeast Asia, making up around 60% of their sales. They said their products had ISO9001 certification. The Canadian company liked what they heard and thought this supplier met their standards.

So, the Canadian company decided to work with this Shanghai-based company as their supplier in China. But this Shanghai company didn’t invite the Canadians to visit their factory. So, the Canadian company got the Red Star Detective Agency in Shenzhen to do a big investigation into the Shanghai company.

The Red Star Detectives checked into the Shanghai company’s background and found out that it had only been around for 6 years and had 20 million RMB in registered capital. In the last two years, they only made 5 million RMB in sales, mostly in China. They only sent a few products to Southeast Asia. This was totally different from what the Canadian company was told.

When they went to visit the Shanghai company, the Red Star Detectives found that they had less than 200 employees, and they couldn’t make a lot of products. Only a few of their products had ISO9001 certification, which didn’t match what the Canadian company needed.

After checking everything out, the Red Star Detectives saw that the Shanghai company had made things sound better than they really were and hid how they were really doing. So, the Canadian company decided not to pick this Shanghai company as their supplier. This way, they avoided taking on any risks in their business and buying things they didn’t want.

This story shows how important it is to do your homework when you’re dealing with Chinese suppliers in business. Many Chinese companies like to make themselves seem bigger and more successful than they really are. This can trick foreign companies into making bad business deals that cost them a lot of money. So, it’s super important to check the facts and go see things in person before you start working with Chinese suppliers.

Go To Top