I. Introduction
According to the United Nations World Water Development Report, over the 14-year period from 2016 to 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, or $114 billion per year. The benefit-to-cost ratio of this investment suggests a significant positive return in most regions.
On this basis, it is clear that the water purification market is gradually expanding from developed nations, such as those in Europe and the United States, into low- and middle-income markets. Taiwan’s water purification industry, which primarily caters to the export market, entered the international market 30 years ago, meeting European and American standards as an OEM. Through the unrelenting Taiwanese spirit and continuous technological advancements to meet customer needs, the industry has transitioned from OEM to ODM, gradually establishing a stable and mature industrial supply chain. Taiwan is now 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 sevenfold in five years. This is due to the unpredictable effects of climate change, challenges in securing clean water sources, and the immense demand for water treatment driven by urbanisation in many developing countries. As such, continuous growth in the market is expected in the foreseeable future.
With the expansion of markets in China, the Middle East, and Southeast Asia, along with the increasing liberalisation of international free trade, the market has entered a phase of fierce competition. Taiwanese water purifier manufacturers, particularly small and medium-sized enterprises, will face more diverse and significant challenges in the wake of new market opportunities. For brand owners seeking water purifier OEMs, the following article briefly outlines the advantages and disadvantages of 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 highly mature, with a complete supply chain ranging from upstream filter material manufacturing, through midstream processing and integration, to downstream finished product assembly. As a result, most international water purifier manufacturers entrust experienced manufacturers to carry out ODM/OEM production. The three common OEM models are as follows:
(1) Publicly available versions of water purifiers for OEM
These are suitable for: New entrants, small businesses, and price-sensitive markets.
This is a common ODM model. The brand owner sources mature products and manufacturers in the market, then replaces the brand with their own logo. The advantage of this approach is that the product offers high stability and is almost problem-free. The maximum delivery time will not exceed three months, with some manufacturers able to ship in less than a month. This is the quickest way to launch your own brand. However, the downside is obvious—products on the market will all look identical, with little to no differentiation. As a result, most of the overseas orders adopting the OEM model are B2B orders, which helps to avoid direct competition between identical products and prevent a weakening of market competitiveness.
(2) Specifications are defined by the brand owner, and the product is fully customised by the OEM
Suitable for: Internationally renowned brands and water purifier manufacturers with extensive design experience.
This model is typically adopted by manufacturers that already possess a certain level of brand strength in the market. For instance, 3M has very strong brand recognition and product design capabilities. Therefore, even if these brand manufacturers lack a full production line, the quality of their products remains unaffected. A simple analogy for this model is the Apple iPhone. Although Apple does not have its own production line, by outsourcing to Foxconn (Hon Hai) as the OEM, it can still maintain effective production quality control and retain its world-leading position.
(3) Publicly available water purifiers for semi-customised design modifications
Suitable for: Medium-sized enterprises with experience in home appliance product development.
This is another common OEM model. Water purifier specifications often differ due to the specific conditions of various countries and regions. For example, the water in Italy is hard, containing high levels of calcium and magnesium ions, so many manufacturers require soft water solutions. Functionally, water purifiers can meet local purification needs by adjusting the filter element configurations. In addition to changing the filter configuration, experienced OEMs can also undertake semi-customised designs based on factors such as water pressure, inlet and outlet pipe specifications, the voltage requirements of pressurised motors, and installation locations, in order to meet the brand’s requirements.
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 fibre membranes), and RO reverse osmosis membranes. Currently, filter manufacturers are primarily concentrated in South Korea, China, Taiwan, the United States, Germany, and several other regions.
(2) Filter housing
The housings for the aforementioned filter materials are typically made of plastic. Most large-scale manufacturers have their own plastic injection moulding machines, enabling them to produce filter housings in-house. These manufacturers are located worldwide, with a significant concentration in Asia.
(3) Fixed parts
This generally refers to mounting brackets, fixing screws, adhesives, etc. These components are relatively simple to manufacture and pose fewer safety concerns, so they are usually produced by specialised upstream suppliers.
(4) Connecting pipelines and connectors
These include: three-way connectors, hooks, 1/4-inch RO water pipes, 3/8-inch RO water pipes, and so on. The connecting components are, in fact, some of the most critical parts since they come into direct contact with the drinking water, although they are often overlooked. The best way to assess the quality of an OEM globally is by paying close attention to these details. A reputable manufacturer will never use secondary or recycled materials for the connecting parts. Taiwanese manufacturers, such as Easywell, have far stricter requirements concerning toxic substances harmful to human health than their Chinese counterparts.
(5) Storage tank
As the name suggests, the storage tank is where the filtered pure drinking water is stored. The main considerations for water storage tanks are the durability and elasticity of the plastic, whether there is any plastic odour, whether there is leakage of toxic plasticisers, the material of the outer shell, and so on. This part is also handled by specialised upstream manufacturers, so when selecting an OEM, attention need only be paid to the product specifications provided by these suppliers.
(6) Various electronic components
Modern water purifiers integrate 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 are being incorporated into water purifiers. The main production centres for these components remain in Taiwan, China, and South Korea.
IV. Analysis of Advantages and Disadvantages of Chinese Manufacturers
Advantages of Chinese Factories:
China holds the title of the world’s factory. The domestic consumption volume is substantial enough to support the robust development of its entire industrial chain. The biggest advantage of Chinese water purifier manufacturers lies in their extremely low prices. Virtually all components required for complete water purifiers can be easily and affordably sourced and produced in China. As a result, the majority of water purifiers used in developing countries, such as India, the Middle East, Africa, and South America, are manufactured in China.
In the OEM market for water purifiers, China’s second major advantage is the superior integration of smart devices and the backing of a comprehensive upstream, midstream, and downstream Internet of Things (IoT) industry. China is the world’s largest exporter of IoT equipment, and naturally, water purifiers have already been integrated into this ecosystem. With smart networking functions, consumers can monitor the status of water purification in real time via a mobile app, which also alerts them when it’s time to replace the filter.
Disadvantages of Chinese Manufacturers:
The weaknesses of Chinese manufacturers are closely linked to the domestic consumption environment. With a population of 1.4 billion, consumer spending capacity varies significantly, and over the past decade, Taobao has become the primary shopping platform. In the quest to secure more orders, it has become necessary to cut costs. Cost reductions, however, negatively impact the reliability and durability of the products, resulting in water purifiers of lower quality. In comparison to Taiwan, Chinese manufacturers do not always offer better quality at the same price point.
Furthermore, China’s political climate is another key factor to consider. Since 2021, relations between China and the United States have continued to worsen. The trade war between the two countries has led to a significant reduction in China’s exports, which has, in turn, disrupted the global industrial supply and demand chain. As a result, international water purifier brands have begun to gradually shift their orders away from China, favouring regions like Taiwan, South Korea, Malaysia, and others.
Up until recently, China enforced a zero-Covid policy, whereby cities were completely locked down once the virus spread. These lockdowns could last for several months, sometimes even up to half a year. During these closures, not only were people affected, but the movement of goods was also tightly controlled. If this policy were to be reinstated due to future outbreaks of Covid-19, this potential risk would need to be carefully considered.
V. Analysis of Advantages and Disadvantages of Taiwanese Manufacturers
Advantages of Taiwan’s Factories:
Although small manufacturers in China possess an irreplaceable cost advantage, they lack diverse product development experience in the ever-changing foreign markets, with more than 90% of the manufacturers primarily focusing on European and American OEMs. This market environment allows Taiwanese manufacturers to be highly adaptable to international markets. Take Easywell, a Taiwanese OEM of water purifiers, as an example: since its establishment more than 30 years ago, its products have been exported to over 50 countries worldwide. The company has also developed a strong ability to swiftly adapt to market demands. Furthermore, Taiwan’s water purification industry has been in development for over 30 years, leading to better product stability compared to Chinese products. The primary reasons why customers are willing to adopt Taiwanese OEM products are their high stability, high quality, focus on drinking water safety, and sustainable operations, which are key factors contributing to the success of Taiwanese manufacturers on the global stage.
Disadvantages of Taiwanese Manufacturers:
It is undeniable that labour costs in Taiwan are significantly higher than those in China. Additionally, many raw materials have to be imported from abroad. As a result, the cost of OEM production in Taiwan is considerably higher than in China, which is why some smaller brands opt to manufacture 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, water purification products typically have a life cycle of over 10 years. This characteristic makes traditional international manufacturers less inclined to adopt new technologies, particularly IoT networking devices, which evolve rapidly. Premature adoption of new technologies could result in a significant rise in after-sales service costs and negatively impact brand trust and image. As a result, most international manufacturers maintain a conservative stance towards new technologies and are still in the stage of testing the waters.
| Taiwanese Factories | Chinese Factories | |
| Main market | Mid to high price market | Low-to-medium entry-level marketSmart 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 |
