At Zudu China, we’re passionate about helping Scottish and British businesses promote their products in China and tap into an audience of more than 1.4 billion consumers.
As the world becomes increasingly globalised and our economy goes through political uncertainty, being able to thrive in a market on the other side of the world can introduce a new revenue stream and take the pressure off of running a local business.
Our digital marketing strategy is designed to help UK companies break into China, and one of our key differentiators is our anti-counterfeiting service, designed to allow firms maintain the integrity of their products in the fast-growing market, whilst increasing brand awareness.
Worldwide, the counterfeit goods market is thought to be worth more than $1.7 trillion - and 80% of all counterfeit goods are manufactured in China. With e-commerce giving companies more power than ever, the production of counterfeit goods is becoming more sophisticated - retailers can sell knock-off goods at discount rates, damaging luxury brands and making it hard to compete in the world’s most lucrative economy. But it doesn’t have to be that way.
Today, we’ve rounded up some of the reasons why anti-counterfeiting is important at Zudu China, and offer some guidance for companies looking to break into the Chinese market…
Your Brand is Important
Whether you’ve been operating in the UK for decades or you’re a startup, your brand is one of your company’s most important assets. You’ve likely spent thousands of pounds building a brand, developing a website, an app, hosting events, attending exhibitions, and delivering the very best products and services you can. It’s not fair that a company can counterfeit your products and sell based on the reputation you’ve worked hard to build. Knock-off products could damage your reputation in China if consumers think they’re buying the real thing.
Keith Brewery, for example, launched their Snake Venom beer brand in China, working hard to build a substantial following in the country. Counterfeiters were keen to capitalise on that following, and at least two copycat products entered the market soon after their launch. With the help of the Zudu China team, Keith Brewery was able to protect their brand, increase the demand of their genuine beer products, and stamp out counterfeits and copycats in China.
Counterfeiting in China is Sophisticated
China is the manufacturing capital of the world - if a company wants to produce a replica of a product and sell it as their own, they can. With enormous manufacturing plants and product designers able to dissect and recreate products as if they were the genuine article in no time at all, it’s alarming how quickly a firm can suffer from counterfeiting; acting fast is critical.
But the truth is that companies are not only fighting the counterfeit battle in China - many counterfeit goods are sold in other countries via e-commerce sites like eBay, Amazon and Wish.com, so it’s a global issue. Indeed, 84% of the counterfeit goods seized in the United States came from China or Hong Kong, and firms in the US lose $200 billion to foreign piracy of intellectual property. Ignoring counterfeiting is one solution, but it’s not the right solution.
The good news is that Chinese consumers have a real appetite for buying genuine products and are happy to pay more for quality merchandise. At Zudu China, we have a QR code and tracking system that involves an inimitable labelling system which provides transparency through the supply chain process. When customers purchase a product, they can confirm the authenticity via text message or a WeChat app, making them part of the process.
Of course, QR codes are only one element of our anti-counterfeiting solution. The strategy takes a multi-faceted approach, using digital marketing to boost brand presence and visibility in the country, further highlighting the differences between genuine and fake products.
Punishment is Rarely Severe
Because of inconsistent intellectual property enforcement and a complex legal system that is off-putting to Western businesses, the country is the counterfeit capital of the world. Unlike in many territories, China has a first-to-file policy, which means trademark rights are awarded to the party that files for them first, rather than given to those who have prior use of the name. If you’re considering expanding into China, it makes sense to register your trademarks as soon as you can - even if you don’t go ahead with expanding, you’ll be able to protect your assets.
Xinhua, China’s official news agency, estimated in 2015 that $45 billion in fake merchandise was available on Alibaba, but that’s just the tip of the iceberg. The internet and social media are making it easier for companies to infringe on copyrights and trademarks and sell goods.
The good news is that China is beginning to go hard on counterfeiting, with Premier Li Keqiang telling journalists that counterfeiting was the “the enemy of fairness and innovation, and [goes] against social ethics”. Earlier in 2018, China’s Ministry of Industry and Information Technology established the China Luxury Authentication Centre, designed to train an “army of luxury authenticators” to fight against fake goods being manufactured and sold in China.
Whilst these changes are positive, the truth is that small and medium-sized businesses can struggle to fight against fakes in the country, and IP lawsuits can be time-consuming and expensive. Being proactive, rather than reactive, with an anti-counterfeiting strategy is key.
China is a Huge Market
Finally, it’s important to mention the size and scope of China and its economy. The country’s counterfeiting problem may be off-putting to some UK businesses who are concerned about exposing their brand and falling victim to counterfeiting in the country, but in doing so they miss out on a market worth more than $12.24 trillion. With a GDP per capita of $8,826.99 and a growing middle class, more consumers than ever have a disposable income that can be spent on luxury goods, and most Chinese consumers place real value in British products.
By fighting counterfeiting head on, rather than hiding in the shadows, you can take your firm to new heights and become a global player. Indeed, entering a market like China can be very challenging and require an initial investment, but the potential returns are too good to miss…
Let Zudu China Help
At Zudu China, we offer a range of digital marketing and branding services that place an emphasis on authenticity, help you increase consumer confidence, improve Chinese sales and establish supply chain transparency. To find out more about how we can help, click here.