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For All The Complaining About Chinese Counterfeits... China Is A Massive Growth Market For Luxury Goods

from the aspirational dept

A few years ago, we noted a study that suggested "counterfeit" goods weren't nearly as big a "problem" as many made it out to be. That's because in a very large percentage of cases, the buyers knew they were buying a counterfeit and did so on purpose because they knew they couldn't afford the real thing. In other words, in those cases, there was no "loss" per se, because the buyer couldn't buy the original at that time. But the really interesting part of the study was the finding that a very large percentage of people who buy counterfeit goods end up buying the real product later. In other words, the counterfeit is a form of marketing.

It appears that may be happening on a large scale in Asia (and China in particular). Despite all the claims that China and other Asian companies are homes to mass counterfeiting, apparently various luxury goods brands are seeing massive uptake and demand in China and across wider Asia. Various luxury goods companies like Prada are announcing record revenue thanks to these countries that are often supposed to be pits of counterfeiting. Perhaps that original study got it right, and lots of folks who used to buy counterfeits are now itching for the real thing.

Filed Under: china, luxury goods, trademark

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  1. identicon
    Anonymous Coward, 29 Sep 2011 @ 11:19pm

    Re: Translation

    It computes just fine. Aspirational buyers start off unable to afford the real thing, so they buy the cheap knockoff. They are fully aware that it is a counterfeit, but they buy it because it is as close as they can get to the real thing. There was no chance of them buying the real thing at that stage, because they cannot afford it. Therefore, there has been no lost sale by the makers of the real thing. The outrage by the makers of the real thing is entirely counter-productive.

    Meanwhile, the buyers have acquainted themselves with the price of the real thing. Then they save up, or their life circumstances change and they get wealthier. Then their counterfeit thing breaks, goes out of style, or gets shabby, whatever. Then our buyer decides to spend the money and buy the real thing. Shazam! The maker of the real thing has made a sale.

    What has happened is that the counterfeit thing has acted as a free advertisement for the real thing. Had the counterfeit thing not existed, the buyer might have bought some substitute thing which was nothing like the real thing. If that happened, then there is no advertisement, hence the sale of the real thing becomes less likely.

    The counterfeiters are actually doing the makers of real things a favor, by giving them free advertising.

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