RO Reverse Osmosis Water Purifier ODMs/OEMs - Differences between Taiwan and China

 

I. Introduction

According to the United Nations World Water Resources Development Report, in the 14-year period between 2016 and 2030, the cost of achieving universal access to safe drinking water and sanitation (SDG targets 6.1 and 6.2) in 140 low- and middle-income countries will be approximately US$1.7 trillion, namely $114 billion per year and the benefit-to-cost ratio of this investment indicates that there will be a significant positive return in most regions.

 

Therefore, on this basis, we know that the water purification market is gradually expanding from developed countries such as those in Europe and the United States to low- and middle-income markets. Taiwan’s water purification industry, which mainly sells to the export market, entered the international market 30 years ago meeting the European and American standards as an OEM which, together with the unremitting Taiwanese spirit, and with constant breakthroughs in technology to meet customer needs, allowed it to move from OEM to ODM, gradually creating a stable and developed industrial supply chain, ensuring the country is one of the world's top two OEMs.

 

 

According to the UN report, the value of Taiwan's water purifier-related product exports to the rest of the world increased seven-fold in five years. This is due to the unpredictable factors regarding climate change, the acquisition of clean water sources, and the huge demand for water treatment due to the urbanization of many developing countries. Therefore, the trend for continuous market growth in the future is predictable.

 

With the expansion of markets in China, the Middle East, and Southeast Asia, not to mention the increasing opening of international free trade, the market has entered a period of fierce competition. Taiwanese water purifier manufacturers (especially small and medium-sized enterprises) will have to face ever more diverse and greater challenges in the face of a new wave of market opportunities. For brand owners who want to find water purifier OEMs, the following article briefly introduces the advantages and disadvantages of water purifier OEMs in China and Taiwan.

 

II. Three common modes of water purifier OEM

After decades of international development, the water purification OEM industry has become very mature, with a complete supply chain from upstream filter material manufacturing, through midstream processing and integration, to the downstream finished product assembly. Therefore, most of the international water purifier manufacturers entrust mature manufacturers to carry out ODM/OEM OEM production. The three common OEM models are as follows

 

[1.] Publicly used versions of the water purifier for OEM

These are good for: New entrants, small businesses, and price sensitive markets.

 

This is a common ODM model. The brand owner finds mature products and manufacturers in the market, and then replaces the brand with his own LOGO. The advantage is that the product has a high stability and almost no problems. The longest delivery period will not exceed 3 months, and some manufacturers can even ship in less than a month. This is the fastest way to have your own brand. However, the disadvantage is also obvious, in that the appearance of products on the market will all be exactly the same. There is little to no difference, so most of the overseas orders that adopt the OEM model are B2B overseas orders, which can prevent the same products from competing with each other and from weakening their competitiveness.

 

[2.] Specifications are specified by the brand owner, and the product is fully customized by the OEM

Suitable for: international famous brands and water purifier manufacturers with and complete design experience.

 

Those who adopt this model are usually manufacturers with a certain existing brand power in the market. For example, 3M has very strong brand power and product design capabilities. Therefore, even if these brand manufacturers do not have a complete production line, the quality of the products will not be affected. The easiest way to understand this is concept is by looking at the Apple iPhone. Even when Apple does not have its own production line, entrusting Foxconn (Hon Hai) to be the OEM, it can still effectively control production quality and maintain a world-leading position.

 

[3.] Using public use versions of water purifiers for semi-customized revision design

Suitable for: medium-sized enterprises with experience in home appliance product development.

 

This is also a very common OEM model. Water purifier specifications usually vary, due to the actual conditions of individual countries and regions. For example, the water quality in Italy is hard as it contains a lot of calcium and magnesium ions. Therefore, most manufacturers demand soft water. Functional water purifiers can meet local water purification needs through modifying the configuration of the filter element. In addition to changing the configuration of filter elements, experienced OEMs can also conduct semi-customized designs according to objective conditions such as water pressure, inlet and outlet pipeline specifications, the voltage difference of pressurized motors, and the installation location to meet the needs of the brand.

 

III. What are the key components of RO reverse osmosis?

 [1.] Filter material

The filter element or filter material is the most critical component for water purification quality. Commonly used filter materials include pp filter cotton, activated carbon, granular activated carbon (UDF), compressed activated carbon (CTO), ion exchange resin, KDF, ceramic filters, ultrafiltration membranes (hollow fiber membranes), RO reverse osmosis membranes, etc. At present, filter manufacturers are mainly concentrated in South Korea, China, Taiwan, the United States, Germany, and a number of other locations.

 

[2.] Filter housing

The casings for the above-mentioned filter materials are usually made of plastic. Most large-scale manufacturers have their own plastic injection machines so they can manufacture filter casings by themselves. The manufacturers are located around the world, and especially in Asia.

 

[3.] Fixed parts

This generally refers to fixing hanging pieces, fixing screws, adhesives, etc. These parts are less difficult to produce and there are fewer safety concerns, therefore, they are usually produced by professional upstream suppliers.

 

[4.] Connecting pipelines and connectors

These include: three-way connectors, hooks, two-point RO water pipes, three-point RO water pipes, etc. The connecting components are actually some of the most important parts because they come in direct contact with the drinking water, although it is generally easy for them to be ignored. The best way to evaluate the quality of an OEM around the world is by paying attention to this detail. A good manufacturer will definitely not use secondary or recycled materials for connecting parts. Taiwanese manufacturers, such as Easywell, have much higher requirements in regard to poisonous substances that are harmful to the human body than Chinese manufacturers do.

 

[5.] Storage tank

As the name suggests, the water storage tank is the place where the filtered pure drinking water is stored. The main requirements for the water storage tank are, the durability and elasticity of the plastic, whether there is plastic odor, whether there is leakage of toxic plasticizers, the material of the shell, etc. This part also has Professional upstream manufacturers who are responsible for production, and for selection of OEMs attention only needs to be paid on the product specifications of upstream manufacturers.

 

[6.] Various  electronic components

Modern water purifiers combine various electronic components, such as motors, solenoid valves, high and low pressure switches, flow meters, etc. With the advent of the IoT era, more electronic components related to networking will be combined with water purifiers The main production countries for these parts are still Taiwan, China, and South Korea.

 

IV. Analysis of advantages and disadvantages of Chinese manufacturers

Advantages of Chinese factories:

China enjoys the reputation of being the world's factory. Since the domestic consumption volume is enough to support the vigorous and sound development of the entire industrial chain China's water purifier foundries biggest advantage is the extremely low price. Basically, the components for the whole machine can be found and manufactured very easily and cheaply in China. Therefore, most of the water purifiers used in developing countries such as in India, the Middle East, Africa, and South America are made in China.

 

In the water purifier OEM market, China’s second biggest advantage is the better integration of smart devices and the support of a complete upstream IoT midstream and downstream industry. China is the world’s largest exporter of IoT equipment and, of course, water purifiers have already been integrated into this. With a smart networking function, consumers can monitor water purification status in real time through a mobile APP that can remind them when the filter needs replacing.

 

Disadvantages of Chinese foundries:

The shortcomings of Chinese manufacturers are also related to China's domestic consumption environment. The consumption capacity of the 1.4 billion population varies, and Taobao has become the main consumption mode in the past 10 years. In order to win more orders, it has therefore necessary to adjust the cost. Cost reduction affects the reliability and durability of the product. Therefore, the quality of water purifiers in China is very low. Compared with Taiwan you can't necessarily get better quality at the same price.

 

Additionally, China's political environment is also an important factor for consideration. Since 2021, the relationship between China and the United States has continued to deteriorate. The trade war between the two countries has led to a sharp drop in China's exports, affecting the redistribution of global industrial supply and demand. In consideration of these factors, international brand water purifiers have gradually begun to withdraw orders from the Chinese market, shifting them to Taiwan, South Korea, Malaysia, and other locations.

 

Until recently China adopted and enforced a zero-Covid strategy so that once the epidemic spreads, cities were closed. These closures could last for several months and even up to half a year. During the closure period, it was not only people that are affected, but the entry and exit of goods was also strictly controlled. Should this policy be reimplemented. due to the uncontrolled spread of Covid-19 in the future, the potential risk has to be guarded against.

 

V. Analysis of advantages and disadvantages of Taiwanese manufacturers

 

Advantages of Taiwan’s factories:

Although small manufacturers in China have an irreplaceable cost advantage, they lack diversified product development experience in the ever-changing foreign market, with more than 90% of the manufacturers being mainly European and American OEMs. Such a market ecology allows Taiwanese manufacturers to be highly adaptable to the international market. Taking Easywell, an OEM of water purifiers in Taiwan, as an example; since its establishment more than 30 years ago, its products have been exported to more than 50 countries around the world, The company has also established the ability to adapt to the market very quickly. At the same time, Taiwan's water purification industry has been developed over more than 30 years, and the stability of its products is better than that of Chinese products. The main reasons why people are willing to adopt Taiwanese OEM products are their high stability, high quality, emphasis on drinking water safety, and sustainable operation, which are the keys for Taiwanese manufacturers to maintain their success on the world stage.

 

Disadvantages of Taiwanese foundries:

It is undeniable that labor costs in Taiwan are much higher than those in China. Additionally, many raw materials have to be imported from abroad. Therefore, the cost of OEM in Taiwan is definitely much higher than in China, which is why some small brands choose to produce in China.

 

VI. Should I choose an OEM in Taiwan or China?

Compared to electronic products with a service life of 3 to 5 years, the life cycle of water purification products is usually more than 10 years. This characteristic makes traditional international manufacturers less willing to adopt new technologies, especially IoT networking devices, which are changing with each passing day. Premature adoption of new technologies may lead to a substantial increase in the cost of after-sales service and affect brand trust and image. Most international manufacturers still adopt a conservative attitude towards new technologies and are only in the stage of testing the waters.

 

	Taiwanese Factories	Chinese Factories
Main market	Mid to high price market	Low-to-medium entry-level market Smart water purifier
Smart Internet Device	Middle	Entire
Product reliability	High	Medium
political, economic and trade stability	Free market	May be affected by the Sino-US trade war
Quality control	Good	Needs to be within the original factory
Cost	Mid to high	Low to mid