Some Perspective On Selling Fake Products from China

saw these signs a lot in NYC chinatown

I can remember back in High School days, maybe this is 1997 or 1998 (sophomore or junior year) and some classmates (i won’t disclose names) found a source of fake oakley sunglasses online and were buying them and sellling them on ebay, making some decent money. I remember looking at the poor quality fake product, and the O in Oakley was actually a “Q” when you looked at it closely.

I then remember maybe early years in university a friend was going to Chinatown in New York and buying fake Louis Vitton handbags, with the original tags, and taking high quality, high resolution photographs of it and listing on ebay making a hefty profit.

Another story is the fake DVDs sold on the Chinatown streets in Manhattan when I was working there in 2003, and the chinese women would keep the movies hidden in a black garbage bags whispering “dvd , 5 dolla” and if a passerby was interested they would display the bag on the ground and show various movies.

After moving to China in late 2007, I have been even closer to the source of this highly profitable black market of fake, or knockoff products. So many times I am approached by reputable people I know to make some cash selling these goods. And on the other side, I have USA buyers pushing to buy these fake products. There is this clear supply and demand for such products, all the way down the supply chain – and I have been exposed to all parts.

Normally, you only hear about the good, fun, profitable stories here in china – the stories of the late 20s or early 30s young Chinese businessman who has made tons of cash and can drive a fancy BMW to his hometown. What a DISTRACTION from the good, hard working Chinese entering the workforce these days……trying to make an honest living but constantly being pressured by friends and colleagues to make some good money with their brains selling these fake products.

No one tells you about the bad stories…..and I believe as the world gets flatter and more transparent, these fake product markets will continue to get shut down, raided, and knocked out of business. I just pray it doesnt hurt those who are really skilled in business…but sadly many of the most clever businessman are tempted to enter the dark side, and never come back from it.

But as I get bolder, and get more trust in my relationships here in China, I ask them – almost getting upset about it ….and I have gotten a few responses, which I want to give you the perspective on (assuming most reading this are westerners or non – Chinese)

• 1) China is still a young country in the global market, we have not yet gotten time or experience to build our own brands – This is a common “sob story” about how Chinese people and companies are poor – both in money and in experience of marketing and sales, to create their own brands. That the costs, even to this day, are too high for a small chinese businessman to consider. They have to manufacture higher quantities with their own OEM logo on it, and then how can they let the world know this brand. It is sad, because I have been screaming so loud online and offline for Chinese factories and trading companies to study how to make their own brand – but they choose the LAZY way, and think its because they have been pigeonholed into doing such ways of business.
• 2) no one buys “generic” products – my customers demand it….if I dont have that famous logo on the product, no one would buy it. I am simply making what people want
• 3) those big brand corporations make enough money – i guess this is what both the buyers and sellers of fake products say, the logic is that this handbag cost $3usd to manufacture, how is it fair the brand can turnaround and sell it for $299usd
• 4) many people cannot afford those top designer brands –its not fair to those poorer people who want to have those stylish clothes and brands, but dont have the cashflow to wear it. These fake products provide a means for these markets to gain access to these high fashion goods. And i dont just mean in usa, i am talking in africa, south america, middle east – all over the world. And those markets are much poorer and cannot afford these authentic designer brands.
• 5) its the western buyers fault – many chinese factories and trading companies will point the finger at the buyers, that it is the buyer who is sending them the products to copy. There is a story i heard about an italian authorized reseller of nike sneakers – he sent a real copy of nike sneakers to a chinese factory to copy – and then sold them in his store in italy right next to the authentic nike sneakers. This way, he would have the authorized dealership logo in his shop’s window, but could buy a certain percentage of his goods from a fake factory in china and put them on his shelves at the same price as the real nike sneakers. So the chinese factory would passionately tell me it is the western buyer’s fault in the first place, and that the chinese factories are simply making the products to the buyer’s specifications. That the buyer wouldn’t order it unless it had the authentic logo on it!

and a really crazy story i heard about fake rolexes – that rolex knows there are huge amounts of fakes on the market, but that if they crack down too hard, these fakes are so similar to the real rolex, that they may then make their own brand! and that this new brand’s quality will be so similar to rolex, there will be a new threat in the market. And the other logic the brand says is that their real target customer wouldnt buy a fake off the street corner, they actually have the money and want to buy the genuine in the authorized dealership – that these people buying the fakes would never really buy an authentic, and its not rolex’s target market in the first place.

Again….these are not my ideas, this is just the years and years of history that has surrounded me while living in the center of markets of fake products….hearing how people justify such acts.

i just wonder when the true emergence of chinese brands will come…..when can legitimate business out weigh the temptation for good guys in China to go to bad business…..