Some Perspective On Selling Fake Products from China

In china business by Michael Michelini10 Comments

a NY shop that was shut down in 2007

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…..

Related Posts


  1. wow USD5 per pirated dvd’s so expensive! it’s only RMB9 in sz haha

    sounds like the chinese luv copying n selling fake stuff ;P n i feel like if i wear sth authentic in sz, ppl’d think it’s fake anyways…

    n yes, most ppl go for the easy, fast n somehow dirty way to make dirty money n become filthy rich…..honest ppl r meant to b slow in promotion n not as rich…

    being in advertising, we can never perceive one product in its production cost but also all the works behind, i.e. branding, marketing, reserach, lab test, advertising, media buying, promotions etc etc

    n my job is to persuade ppl to buy sth with a huge mark up. n well, somehow it’s ‘cheating’ as well.

    for some designers, being copied is also a compliment, in a way it is. my fren who’s a designer n is trying to build his own brand. it’s the first time of doing a real business n all he wishes for is to earn the first round of $, which ppl buy the first round of authentic products. copying is unavoidable, esp in china. he dun care as the first round of profit is prob satisfactory.

    when i was in milan, i saw a really funny scene, i should hav taken pix but dare not to.
    hawkers were selling the fake products rite in front of gucci store, so if ppl r planning to buy fake product, they can get into the store n then buy the same fake stuff rite outside~ so convenient!!

    actually what’s happening in the world is, which ever brand is popular there’d b a copy brand / product follow~ like the iphone, so many different versions of it, every brand’s imitating it. the sz fake one even hav more solid function than the real one~ haha how amazing

    n this’ just how the market rolls~ so normal~

    1. Author

      yes!! fake DVDs in USA are more then the real ones are in China, funny right – but its all about risk/reward – if someone gets caught in USA selling fake DVDs…i dont know….i think if they are a foreigner they are like deported or marked on their passport, and a citizen…..well a huge fine or something crazy

      interesting way to thinkn about your own job in advertising – cheating people to pay way more then the actual cost – i remember from some of my business classes, its called analyzing

      WILLINGNESS TO PAY – not based on how much the product cost to manufacture, but how much the end customer thinks it is valued and they think is a fair price to pay….

      But yes, this world is getting……..crazier…..and i dont see fake products going away….there will always be this black market and hidden way for people to think and try to get rich quick…..

      kinda sad, but its what makes the world go around. right

  2. Good food for thought – such a complicated issue mate! Culture, Education, Experience, Have and Have-nots, Trust, International Economics. I’ll let the big heads worry about dissecting it – my take away is that there is a short term opportunity to make a killing selling fake goods if you don’t mind tarnishing your name and working in the ‘grey’.

  3. Dammit – if your the reputable brand just produce a cheaper knockoff yourself to fill that need – good ‘ol Chinese ingenuity! It’s going to be done anyway might as well be you that captures that profit. 🙂

    Would it surprise me to find LV discreetly funding hand bag factories that notoriously copy their bags – hell no. Gotta follow the market right?

    1. Author

      well, i mean as far as your idea that LV is behind making their own fakes….I doubt that…

      what LV could do is make a lower cost BRAND targetting those people who cannot afford it.

      but then again, that is what GAP and EXPRESS and other mid-class chain stores try to do.

      the idea of LV is that it is EXCLUSIVE and only the top-notch (haha) people can get it.

      There was another idea about AIR JORDAN SNEAKERS – and how poor urban kids in the streets would beat up each other walking home from school to rob the sneakers. Some people think its NIKE’s fault….they are marketing EXPENSIVE high end sneakers to the poor, urban kids who cannot afford it.

      I think the only way to solve this is COMMUNISM – which I do not support – but so long as there are people who can afford something and others who cannot, there will always be this viscious cycle

  4. wellwell, LV’s leather’s special, not sure if it can b copied in cheap factories. As it’s nonflammable, tho, no one’d really burn it ;P

    urban kids can wear the look alike but material, texture r all different. they can’t jump as high as those in real air jordan ~

  5. Pingback: If You’re Going to Do Blackhat things – Keep your mouth shut!

  6. Pingback: Perspective of Inner China from New Friends in Dongguan

  7. Pingback: Issued Another Lawyer Letter, Part of Doing Internet Ecommerce Business in China

Leave a Comment