The most important thing to understand is that Shenzen is where electronics, molding (especially plastics/silicone), LEDs, and myriad other technology markets are centered. Due to the nature of the Chinese market, almost every business and especially counterfeiters will need to have some kind of entity in either Taiwan or Hong Kong. It has to exist to efficiently participate in the international market. Shenzen is literally how you get off the peninsula Hong Kong. I do not think I need to sperg about the Chinaman's reputation for counterfeiting.
So how this practically happens begins with the original designer. They've likely worked with very small, very local firms for development and prototyping. When it's time for sale they head to Shenzen. Anywhere they end up will require molds. Whether coincidence or conspiracy they never get the first one right. If you do not assert ownership of the molds they will keep them. Even if you have excellent supply chain security they have a million ways to confound you.
The heavy hitters will pay top dollar for those "messed up" molds. The goal is to figure out the plan, figure out the cheapest/fastest BOM to approximate the real thing, and beat the original to market. Many businesses have faced crib death because of this. Their product in production when they shutter. More commonly, the Chinaman has overquoted you on costs, so they can afford extra supplies. That 996 lifestyle allows for a lot of after-hours production compared to the expectation of someone used to 40 hour weeks. Defective units and cast offs from all sources are sold at secondary markets. The buyers will fix it (or simply skip this step) and try to sell it on.
That single-piece silicone mold was their goose that laid golden eggs. You pay the party man, the party man's enemies, the triads, and everyone of import to fuck off and ensure others do likewise. You get your domestic man to have eyes on it and every copy 24/7. This really means a team of men from home. Your manufacturer provides translators. You bring your own, independent, and well-compensated translators too. If one must be discarded, watch them destroy it mechanically in front of you, and keep watching until it is melted into a puddle. (edit: the molds, not the translators. Well, not necessarily.)
No terms with you taking ownership any further inland than FOB origin. Pay your brokers well and ensure they understand the local area's customs. Whatever bank you work with, have them ready to send the wire at whatever time the truck is at the factory to get your product and molds out of there. Pay any delay/detention fees. Get wire instructions at the beginning of the agreement. Take a big step back to reconsider if it changes at any point in the process. Have your point of contact on the phone, preferably on video. You think I am kidding but you could be getting goatfucked sideways without any indication on your end.
In case this sperg has not made it apparent, I am intimately familiar with this whole sector. I understand (and even begrudgingly accept) the situation on almost every level. This isn't a fraction of what I wish I could say while keeping your attention. I understand this as an interesting (if weird) hobby interest. I understand this at a credentialed academic level in some cases, and I have practical experience in handling things like this from cradle to grave. I have seen more people fail to pitfalls I never imagined than you could imagine now. They ended up like this company, another forgotten name selling in a sea of near-identical products.
