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Apparel Logistics in China: Beware of Fake Brand Knockoffs

China-Fake-Apple-Store.jpgA year ago, Chinese officials began shutting down a slew of Apple stores around the country. No, this had nothing to do with any sort of Google-esque trade dispute with the government. Rather, these were imposter stores that looked like real Apple stores and quacked like real Apple stores (with pretty impressive detail) but that were, in fact, rip-offs.

Here's the kicker: one store's employees didn't realize that they were working for an imposter. Actually, here’s the real kicker: the employees didn’t realize that despite the fact that there were two other "Apple" stores (including one “Apple Stoer”) nearby.

The employees' probable disappointment aside (seriously, look how proud this guy seemed to be working there), the incident highlights just how brazen brand theft in China can be.

Chinese-fake-apparel-brands.jpgThe Middle Kingdom is irresistible for companies from industries of all types, apparel firms included. There are approximately 1.3 billion reasons why any company would want to hawk their wares in a market of that size — especially considering that, although some hundreds of millions of Chinese people still live in relative poverty, millions more are joining the middle class each year. More relevantly, there are now an estimated 130 million Chinese people in “the consumer class” — the demographic with enough disposable income to spend on western brands. Yet these consumers are spending at stores with names like "Dolce & Banana", "Paradi" and "Anmani" rather than Dolce & Gabbana, Prada and Armani.

After all, as we discussed in June, prominent apparel retailer such as Brooks Brothers have made it work. And the four most profitable (legitimate) stores for Apple itself are located in China. Simply put, as the U.S. economy continues to wheeze along at less than full strength and as the European economy appears to be settling into a state of permanent crisis, investing in emerging markets such as China can be an excellent way to make up for sagging Western profits.

But it's not easy. And as the knockoff Apple stores demonstrate, companies must be ready to address major challenges such as brand protection when seeking to compete in the Chinese market.

According to The Financial Times:

"Chinese courts and administrative bodies deal with more than 100,000 intellectual property rights (IPR) violation cases each year, many of them brought by foreign companies. But “the percentage of judgments that are enforced is very low and for a lot of international companies winning an IPR case in China is itself a victory”, according to Luke Minford, head of China operations at consultancy Rouse & Co."

Top-notch apparel supply chain management won’t help you navigate the byzantine Chinese legal system (check out this Apparel Magazine article for some more specific advice about brand protection in China), but it will give your company the resiliency and efficiency to be able to deal with these sorts of inevitable headaches.

At The Apparel Logistics Group, we have vast experience with end-to-end global supply chain management for apparel companies. And our apparel design and merchandising experts can help you craft a fashion logistics strategy that allows you to maintain control over your brand and your products — no matter where in the world they’re made or sold.

Posted: 12/5/2012 3:02:40 PM by Global Administrator | with 0 comments


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