The only minor flaw is that its success depends, to an extent, on people believing that it is something that it is not.
More than that, it depends on people not trusting Chinese companies. If you don't have proprietary technology then you're dead in the water once your Chinese supplier builds some brand value of their own.
Too right. Once more people realise that companies like Hongfu, Ican and Lightbicycle do offer worthwhile warranties and provide replacement parts for their products, that business model gets harder. It will take a long time though!
More than that, it depends on people not trusting Chinese companies. If you don't have proprietary technology then you're dead in the water once your Chinese supplier builds some brand value of their own.