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. icon
    PaulT (profile), 30 Sep 2011 @ 1:31am

    Re:

    "Most knockoff buyers cannot afford the real thing, and then they go ahead and buy the real thing?"

    It's quite simple. Note the word "later" in the second quoted sentence.

    Most people start with lower incomes. They want the designer goods, but for whatever reason cannot get them. But, they still want the cache that comes with that brand rather than a lesser name or no-name item. So, they buy the knockoff.

    Later on, they have more money and can afford the real thing. They still want the cache that comes with the brand, but now since they can afford the real thing they're not going to continue buying the knockoffs. So, they buy the real thing.

    They could not have bought the real thing earlier even if the counterfeits weren't available. They're not going to lower themselves to the knockoffs when they can buy the real stuff. Hence, the counterfeits probably don't really impact sales, even if the counterfeit buyers are actually a larger group overall.

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