Chinese manufacturers themselves seem to follow this model. When they sell cheap junk, you see those one-shot noname brands. But once some market niche is flooded at the bottom, and the only way to get more of that market is to expand into higher-quality offerings, you start seeing established brands that care about their reputation, to the point where they sometimes outdo Western brands. One example that I know through my hobby is Holosun - not only they compete directly, and quite successfully, against Western market leaders on features and quality, but, in US at least, they have live support based in the country - not the usual call center somewhere in India.