The early years of the 2010s felt like bad years for fakes in China.
It seemed like there was a new expose popping up every week, whether it was rat meat dressed up as lamb, fake Apple stores that even fooled the staff, or fake chicken eggs.
Today there is an occasional headline about a police bust of counterfeit condoms or infant formula; the constant bombardment of media about fakes has subsided.
There has been a genuine increase in public and private resources and direction to combat fakes, coupled with more positive court rulings.
Beijing’s clampdown on corruption and the growing number of Chinese brands with their intellectual property to protect has increased the focus on fighting fakes.
But don’t be fooled – just because we’re not often hearing about counterfeits, the dark underbelly of fake products remains rampant in China.
Just this month, four separate gangs were arrested in Guangdong with millions of dollars worth of fakes from wine to health supplements.
This is just a drop in the ocean of the wholesale counterfeiting happening in China. In 2016, a US Chamber of Commerce report noted that mainland China was the source of 72 per cent of global physical trade-related counterfeiting.
Add Hong Kong to the mix and you’re up at 86 per cent – an estimated $397 billion. And 12.5 per cent of China’s 2016 exports were calculated to be fakes.
Whereas some Chinese consumers are attracted to cheap rip-offs, many are duped unwillingly. As recently as the Singles’ Day sales in November last year, 40 per cent of cosmetics bought from cross-border platforms were fake.
China’s fake endemic spans far beyond products. The latest wave to sweep ecommerce sites is fake advertising using stock images of weathered old men, praying on consumers’ empathy to ‘help poor rural farmers’ selling fruit.
For brands, there are a host of steps businesses can take to minimise the risk. The first and most obvious is ensuring you’ve done all necessary trademarking in the relevant classes.
A recent article in Harvard Business Review detailed seven other ways businesses could fight counterfeits in China, including finding a good local lawyer and investment in anti-counterfeiting technology.
Another of the recommended steps is to join forces with ecommerce firms, the most obvious being Alibaba.
Alibaba has long been labelled a villain in the counterfeiting world – the enabler for vendors to get their fake products to the market.
Many argue Alibaba could be using more of its immense technology resources to rid its platform of fakes.
Its listing on the New York Stock Exchange in 2014 and then being booted out of the prestigious International Anti-Counterfeiting Coalition in 2016 were catalysts for it to lift its game.
The company now uses algorithms to scan the 1.8 billion listings on its platforms, runs test-buying programs that seek out fakes, and assesses reports from brands and rights holders.
Members of its AACA (Alibaba Anti-Counterfeiting Alliance) receive priority treatment, which has helped increase its membership from 30 in January 2017 to 105 today.
Beyond the Harvard Business Review recommendations, there are numerous smart marketing and channel initiatives to reinforce your products’ authenticity with consumers.
Agencies such as China Skinny can assist with this.
This article was originally published on http://www.ChinaSkinny.com
Mark Tanner is the founder and managing director of Shanghai-based China Skinny. Through his agency he has worked with over 150 international brands such as IKEA, Colgate, Tourism Malaysia, ANZ, Westpac and IHG on their China market entry and growth strategies, trend analysis, branding and new product development.