FIGHTING AGAINST COUNTERFEIT IN CHINA

It’s a normal thing, seeing people holding fake Prada or LV or other brands in China. It’s a normal thing too to see people selling Gucci or Prada at the flee market in China. Getting further, in Shanghai or Shenzhen, the fake markets are one of the tourist attractions, where the sellers can speak English! From my friend’s experience, they set a very high price, well, sometimes it depends on the quality. There are terms like Super Quality (very similar like the original one, and it’s not cheap), Quality 1 (not that similar), Quality 2 to Quality 4 (you can spot that they are fake). But, you have to bargain! For example, the super quality Chanel bag, they’ll set the price at RMB 2,000 or $400, but if you are good at bargaining, like my friend, you can take the so called “Chanel” bag home for RMB 500 or $100 only!

Shanghai Nanjing Road Fake Market

The Burning “Fontanelle”

In the country where I was born, ‘burning fontanelle’ is the term for anger that can’t be hold anymore. I think it’s the best term that fits numbers of luxury brands condition caused by the forgery that’s done by many Chinese manufacturers. They finally began to take action against the increasingly important problem of counterfeit goods in China.

The combination of producing a large percentage of products and loose government regulation makes China particular susceptible to counterfeiters looking to copy luxury items and sell them at a cheaper price. Rania Sedhom, the managing partner at Sedhom & Mayhew, Pllc., New York commented that laws regarding trademarks in China are different from those in other countries like the U.S and without fighting the war on counterfeit without requesting Alibaba and other large Chinese companies to lobby for legal change, will have little to no effect (click here for Jack Ma’s response for counterfeiting goods inside Alibaba).

Some also argues that many products are produced in Chinese factories, that the percentage of goods leaving China is higher than other nations. In addition, Chinese government has previously neglected to take action against counterfeiters, and Chinese laws regarding intellectual property are not strictly enforced, but, there has been some improvement, likely as a result of recent lawsuits.

Take a look of this many Starbucks incarnations in China : (find out more about Things Happen In China here)

Or how about this McDonalds’ incarnation?

The Battle Against Counterfeit

In 2013, Cartier won with a trademark infringement lawsuit against China-based companies, indicating that luxury marketers should not ignore threats to brand equity in the country and send a message to counterfeiters. Cartier won in a Shanghai court after it filed a lawsuit against two jewelry companies based in Beijing and a Chinese online supermarket that sells these companies’ products for using the brand name without the French jeweler’s consent.

Guess what, the total value of counterfeit goods originating in China is estimated to be $1.22 billion. Each year, more than $28.5 billion in profits is lost in the EU due to counterfeit apparel and accessories. Luxury goods are often subjected to counterfeits, which weaken the brand’s position and harm the trust. In other words, the brand reputation is the most significant negative result of counterfeit goods.

How to Diminish the Counterfeit?

It’s for both brands and governments benefit and both of them have to cooperate to take action against counterfeiting. There are many ways that can be taken to prevent transportation. Consumer educations and law officials on how to distinguish counterfeit products also can be done.

Olshan Frome Wolosky LLP’s, Mr. Feinberg said that strategy would include the proper registration of a brand’s trademark in the countries it does business in, plans to do business in and produces in. Also, implement certain product security measures to protect products from being counterfeited can help.

While China needs to stricken its policies, the U.S. government and luxury brands have to do their part in the fight against counterfeit merchandise.