China's Manufacturers Now Producing Copies Before Original Products Are Even Launched

from the taking-the-tachyonic-train-to-Shenzhen dept

Techdirt has written a number of articles tracking how China is moving beyond its traditional counterfeit imitation culture to one of collaborative innovation, as exemplified by "gongkai". An article on the Quartz site provides a useful update on this world, concentrating on developments in Shenzhen, generally regarded as China's hardware equivalent of Silicon Valley. Things have now progressed from simply copying top-selling products, to spotting future winners on the Web:

Thanks to the internet, factories and designers looking for the next hit product can easily turn to Kickstarter, Amazon, or Taobao to see what gadgets are hot.
The article describes how nimble Chinese operations even produce their own versions before the original is released. For example, Yekutiel Sherman, an Israeli entrepreneur, came up with a design for a smartphone case that unfolds into a selfie stick. After months of research and design, here's what happened:
one week after his product hit Kickstarter in December 2015, Sherman was shocked to see it for sale on AliExpress -- Alibaba's English-language wholesale site. Vendors across China were selling identical smartphone case selfie-sticks, using the same design Sherman came up with himself. Some of them were selling for as low as $10 a piece, well below Sherman's expected retail price of £39 ($47.41). Amazingly, some of these vendors stole the name of Sherman's product -- Stikbox
As the article goes on to describe, enforcing traditional monopolies like patents is so difficult as to be pointless, thanks to the highly-fragmented and fluid nature of Shenzhen's ecosystem. Instead:
Businesses are now forced to come to terms with this new reality. It’s not enough to create a product with a groundbreaking design or features, like a smartphone case that turns into a selfie stick. Companies dealing in the creation of physical goods now must make products that are impossible to copy exactly from the get go, by focusing on a special feature they can protect, or creating a coveted brand name consumers will pay more for.
In other words, the competitive environment in Shenzhen is driving the uptake of approaches that Techdirt has been advocating for years. That's good for customers, who enjoy a greater choice and more rapid innovation as a result, but this shift can be good for companies too, as the Quartz article notes:
Joffe, the venture capital investor, argues that some companies might even benefit from copycatting, as it can bring more awareness to the product itself. "If you have more customers buying the fake product then it creates more awareness for the real product, and it becomes an aspirational thing. At some point they might be able to afford the real thing."
It's well worth reading the whole article for its description of the Shenzhen scene, even if regular Techdirt readers will find the main ideas there extremely familiar.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    David, 21 Oct 2016 @ 1:23am

    Are we even reading the same article here?

    Boldings by me.

    As the article goes on to describe, enforcing traditional monopolies like patents is so difficult as to be pointless, thanks to the highly-fragmented and fluid nature of Shenzhen's ecosystem. Instead

    Businesses are now forced to come to terms with this new reality. It’s not enough to create a product with a groundbreaking design or features, like a smartphone case that turns into a selfie stick. Companies dealing in the creation of physical goods now must make products that are impossible to copy exactly from the get go, by focusing on a special feature they can protect, or creating a coveted brand name consumers will pay more for.

    What do you even think "special feature they can protect" means? That they are going to stand around the product with guns and shoot anybody who breaks off the feature in question?

    Of course this article very much promotes poisoning the taking with patents, pointing out that first-to-market does not work any more.

    reply to this | link to this | view in chronology ]

    • icon
      TechnoMage (profile), 21 Oct 2016 @ 1:43am

      Re: Are we even reading the same article here?

      Agreed, I'm glad someone pointed out this part since in my comment I decided to approach it from the other end of the article with his blanket statement about it 'being good for consumers' w/o any supporting evidence, etc.

      reply to this | link to this | view in chronology ]

    • icon
      jsf (profile), 21 Oct 2016 @ 8:42am

      Re: Are we even reading the same article here?

      They could be referring to stuff that is typically considered a trade secret. Something that may not be patentable, but as long as it is a secret you have a potential advantage. Classic examples of trade secrets are the recipe for Coca-Cola or Twinkies, the formula for WD-40, the algorithm used to create the New York Times Bestseller List.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Oct 2016 @ 7:57am

      Re: Are we even reading the same article here?

      The "feature" in question would be a non-tangible feature like brand/company loyalty or an ongoing service.
      Y'know, like it says in the article.

      reply to this | link to this | view in chronology ]

  • icon
    TechnoMage (profile), 21 Oct 2016 @ 1:40am

    Statement without supporting evidence

    "That's good for customers" This statement doesn't have any supporting evidence for it.

    "Companies dealing in the creation of physical goods now must make products that are impossible to copy exactly from the get go, by focusing on a special feature they can protect, ..."

    Actually I don't know if that -is- good for customers. I'd think that the owner of Stikbox (which did R&D a novel idea) would be less likely to invest a lot of money into further R&D if they have a lesser expectation of ROI. What about inventors who invent something that -is- revolutionary, but -is- easy to copy... (An example of that would be the lightning rod (which yes, I know Ben Franklin didn't patent it so as to save more lives, but still...)).

    Brand loyalty is fine, but requiring inventors to make 'needlessly complex' parts/etc. just for the sake of preventing cheap knock-off Chinese clones (for a short time) I'd argue is ANTI-Consumer. In many ways... Hurts R&D, also hurts people's ability to fix their own products. And, it potentially hurts aftermarket accessories/etc.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2016 @ 2:02am

      Re: Statement without supporting evidence

      Find proof that widespread copying and reuse of ideas prevents R&D. While doing so, explain why lack of control over re-use and the making of derivative works along with free distribution, has not crippled Free and Open Source software.

      reply to this | link to this | view in chronology ]

  • icon
    wereisjessicahyde (profile), 21 Oct 2016 @ 4:15am

    Hmmm

    China Already Has a Handheld Like the Nintendo Switch

    http://www.kotaku.co.uk/2016/10/21/china-already-has-a-handheld-like-the-nintendo-switch

    Hard to tell who copied who, because the Chinese product came out last year.

    reply to this | link to this | view in chronology ]

  • icon
    Padpaw (profile), 21 Oct 2016 @ 6:25am

    sounds more like stealing to me. They are not being competitive, that would require offering a better deal against something already being made. here they steal an idea and claim it's their own.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2016 @ 6:57am

      Re:

      I was going to say something, but I can't remember what it was. Someone stole my idea! Bring it back!

      reply to this | link to this | view in chronology ]

    • identicon
      David, 21 Oct 2016 @ 8:10am

      Re:

      They don't claim the idea being their own as far as I can see. They just don't see the point in not picking up a good idea and making something from it.

      The Communist motto is "everyone according to his abilities, everyone according to his needs". Capitalism links the two, meaning that if you have needs you better monetize your abilities or else. In Communism, your basic needs are covered and if your abilities can be made use of without further indulging you, there is nothing immoral about doing so.

      The idea that anybody is entitled to cash in on any amount of improvement he carries into the world is just not part of the belief system. Even while China tries interacting more with capitalist society, it's just not what they themselves were taught to believe in, and it shows.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Oct 2016 @ 8:30am

        Re: Re:

        Baloney!!!

        Capitalism is the principal that people can privately own business and make decisions about their privately owned business.

        Everything you said has NOTHING to do with Capitalism directly. Capitalism will NOT look the same under a Plutocracy like USA as it will in a Communist state like China... or in a Free-Market like USA used to be a century ago.

        Oh, and Capitalism has nothing to do with welfare or charity and neither does communism. That is just idealist propaganda sold to idiots that cannot see or think for themselves! There are lots of poor communists with no food! The facts of life reveal that communism and socialism are just fancy terms for the political elite having more than the poor while not calling it capitalism as you so put it!

        reply to this | link to this | view in chronology ]

      • identicon
        Aludra, 21 Oct 2016 @ 1:13pm

        Re: Re:

        They don't claim the idea being their own as far as I can see.

        Yeah, I don't see that either.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 6:54am

    It’s not enough to create a product

    Having an idea is not the same as creating a product. Here, someone had an "idea" for a phone case, but it was someone else who actually "created" it. Execution is important.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2016 @ 7:02am

      Re: It’s not enough to create a product

      He didn't just have an "idea" (I have no idea why you put idea in quotes). He spend of time researching how to make it. Then, after he's done, the knock-offs swoop in.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Oct 2016 @ 8:02am

        Re: Re: It’s not enough to create a product

        You mean BEFORE he is done?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Oct 2016 @ 1:09pm

        Re: Re: It’s not enough to create a product

        The story said that the Chinese actually started making the product before he did. Are you saying that's a lie? Citation, please.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 7:17am

    I don't have a solution but I admire the problem

    As others pointed out, there is a contradiction in the article stating patents are dead and inventors must protect their designs. I don't know what the answer is, I am not a huge fan of patents. But taken to the logical conclusion, who would invest time, effort and money into something new if it is going to be on the shelves by a competitor before they ever get started?

    reply to this | link to this | view in chronology ]

    • identicon
      Paweł Płóciennik, 21 Dec 2016 @ 3:49am

      Re: I don't have a solution but I admire the problem

      I have other conclusion, who would spent money on patents and for this reason his product to be overpriced compared to chinese sellers ?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 8:11am

    Patent and Copyright hate...

    Okay guys, Patent and Copyright are not inherently evil.

    These systems were put into place to avoid shit like this. The problem is that we let those two monopolies to get way the fuck out of control.

    I think it should be 100% okay for a business to create knock-offs, but there should be a default gross royalty enforced by law and at a preset rate, unless the owner of patent/copyright agrees to a different rate with the producing party. This will guarantee that the inventor gets their share even if someone beats their ass to market with it, while simultaneously allowing the market to benefit from a more open and less monopolistic & restrictive regulatory environment.

    After the first sale of the product available on the market is released, the 10 year countdown starts, and after 10 years, it becomes public domain!

    All medical and food items/research are not eligible for patents or copyright application! They are too important and cost lives to lock behind a corporate paywall!

    reply to this | link to this | view in chronology ]

  • icon
    Violated (profile), 21 Oct 2016 @ 8:30am

    Shenzhen

    The World needs to get over China copying their product when not only can China make a better product they can also sell it for a lower price.

    The Shenzhen ecosystem runs on "Just in time manufacturing" where their goal is to bring new products to the market in the shortest possible time.

    To achieve this goal product information is freely shared between factories allowing each factory to produce components that are later assembled into a whole. They also support open source software allowing anyone to add desired features that the whole community then benefits from.

    They also don't care about your intellectual property and patents due to the simple fact that even if your litigation shut down one factory supply then there are dozens more factories producing the product. They can also be the first to patent a product in China meaning they defend themselves by suing you back.

    So the end truth is Shenzhen have got everything perfectly correct to flood the world's markets in cheap products in record time. You also don't have to look far to see that eBay and more are big supporters to bring Shenzhen to the world.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2016 @ 8:35am

      Re: Shenzhen

      This is why people are trying to push the bullshit TPP around the global.

      The idea is to Force China into signing on or be forced out of the global market.

      I keep telling everyone that War is always fought over power and money! Civil Wars are the same fucking way, those are fought over power and money too, just that it is the Citizens vs a government instead of Nation vs Nation.

      reply to this | link to this | view in chronology ]

      • identicon
        Almach, 21 Oct 2016 @ 1:26pm

        Re: Re: Shenzhen

        > The idea is to Force China into signing on or be forced out of the global market.

        And just whose forces do you propose using? Don't forget, China is nuclear armed.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Oct 2016 @ 2:04pm

        Re: Re: Shenzhen

        > The idea is to Force China into signing on or be forced out of the global market.
        While getting China t Sign on is an objective, forcing them out of the global market would bankrupt many major US companies who moved their production to China. Those companies want the Chines production capability, but they do not want Chinese companies to produce goods for their own profit.

        reply to this | link to this | view in chronology ]

  • identicon
    That Guy, 21 Oct 2016 @ 8:39am

    Not "collaborative innovation," just more "counterfeit imitation culture!"

    Techdirt has written a number of articles tracking how China is moving beyond its traditional counterfeit imitation culture to one of collaborative innovation...

    Well, this isn't one of those articles! For the first time in a long time, I think a Glyn Moody post is incoherent!

    Exactly what kind of "collaborative" innovation is ripping off someone else's product while the said someone else is trying to raise money to manufacture it in quantity? And stealing the fanciful (i.e. trademark) name, too?

    That seems to exactly exemplify "traditional counterfeit imitation culture!"

    According to this post, the inventor sweats to perfect a design, Chinese firms create cheap knock-offs before the inventor can start manufacturing, the public benefits one time only from cheap access to that particular product, then the inventor, sadder and poorer but much wiser, stops inventing things and instead bribes his local government to give him a monopoly franchise to sell ice cream the in park or something-- some business in which he too will get to rip people off, since innovative engineering goes completely unrewarded.

    reply to this | link to this | view in chronology ]

    • identicon
      Lesath, 21 Oct 2016 @ 1:34pm

      Re: Not "collaborative innovation," just more "counterfeit imitation culture!"

      I must have misread the article. I thought it said the Chinese were manufacturing the products. But you say they were stealing them. Who were they stealing them from? And they stole the trademark too? It should be possible to get the PTO to give that back.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 8:51am

    Mother Nature complaining about how Evolution is ripping her off

    "The article describes how nimble Chinese operations even produce their own versions before the original is released."

    Those damn bacteria are evolving faster than the drug companies can develop *patented* antibiotics!

    Evolution was developed to make sure that no organism could "roadblock" innovation.

    It's worked pretty well for the past several *billion* years.

    reply to this | link to this | view in chronology ]

  • identicon
    Max, 21 Oct 2016 @ 9:08am

    Nonsense.

    "Companies dealing in the creation of physical goods now must make products that are impossible to copy exactly from the get go, by focusing on a special feature they can protect, or creating a coveted brand name consumers will pay more for."

    Guess again, there's no such thing anymore. As soon as the basic idea for the product is known, IT WILL BE COPIED, even if they have to re-implement in a completely different way some obscure "secret" detail you thought you can protect. Newsflash: there's nothing that you can possibly come up so original that someone else can't make something else that works just like it. The incremental improvements we so proudly love to patent are infinitesimally small and ludicrously insignificant.

    And it's just as well. Hell if I'll pay five times the price for something that can be made for a fifth instead, regardless of who came up with the "idea", regardless of what is says on the logo.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Oct 2016 @ 10:25am

      Re: Nonsense.

      And then your USB-C charger killed your phone. At least you only paid 1/5th the price of a genuine charger. Now you can post a bad review for the genuine manufacturer while the knock-off got all your money.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 11:41am

    Wikipedia had a detailed article discussing this very phenomenon, but like many Wiki pages about controversial subjects, it was quickly deleted.

    http://archive.is/90ECm

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 2:45pm

    So nobody saw that coming?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 2:57pm

    I have a pair of underwear with DARTH DADER on wasteband. I want to copy them an sell them back to the chinese. Of course they'll know they are copies because they are wearing the VADER version!

    reply to this | link to this | view in chronology ]

  • identicon
    sarahsanth, 22 Oct 2016 @ 12:26am

    Wholesale Supplier Directory

    hi guys,
    I had an great product in this with excellent prices go head
    by through this :http://tinyurl.com/zqz288b

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Oct 2016 @ 1:17am

    Some things not quite recognised

    Violated above made a salient point that information is muchly shared in Shenzhen. There is another factor that makes them successful - fast turnaround in making tools (especially injection moulding tools).

    To get things to market, with such things as the selfie-case, it takes more than copying the product, the entire manufacturing tooling has to be made.

    If they can do this in just a couple of weeks, there is much to be said for their basic and advanced manufacturing regime.

    Irrespective of JIT manufacturing, there is much that must be done first to allow this. The Chinese are demonstrating that they have this functional capability down pat. Even if other areas are screwed up, they are not just copiers of ideas. They are well in advance of Western manufacturing capabilities. They are a force to be reckoned with and we need to be able to find out how they do and create systems that can be as dynamically adaptive as theirs. If we don't then goodbye high technology in the western world.

    reply to this | link to this | view in chronology ]

    • identicon
      Gorgonea, 22 Oct 2016 @ 8:18am

      Re: Some things not quite recognised

      If we don't then goodbye high technology in the western world.

      Who needs technology when you've got lawyers? I think we've got many more of those than they do.

      reply to this | link to this | view in chronology ]

    • identicon
      Mel, 22 Oct 2016 @ 9:26am

      Re: Some things not quite recognised

      If the inventor had had access to ShenZhen-style businesses he could have talked to some people, squeezed his credit card a little harder, and had product selling in a week. As it is he had to go to Kickstarter to raise money so he could start to ... We've know from Thorstein Veblen in 1905 or so (The Theory of Business Enterprise) that the meta-strategy of business is to throttle production so that The Businessman can squeeze profit for himself from a process that he otherwise has nothing physically to do with. So this is how that's turning out.

      I think the plan in the western world is to be the Executive Suite for the globe. High technology isn't particularly needed there.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 Oct 2016 @ 9:59am

        Re: Re: Some things not quite recognised

        I would also bet that the person with the idea could get advice on design details from manufacturers and mould makers early in the design process, which helps to save a lot of research time. I would also bet that a lot of the activity took place face to face, with people able to make decisions, avoiding that big waste of energy and time, multiple layers of pen pushers.
        This makes a big difference in how long it takes to get a viable design, when production requirements need to be considered, and eliminates some of the iterations that happen when the designer does not have direct access to manufacturing expertise.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Oct 2016 @ 4:25pm

    Good for them.

    reply to this | link to this | view in chronology ]

  • identicon
    Nathaniel, 23 Oct 2016 @ 3:08am

    This was one of my favourite things when I lived in China

    There are 2 things that I noticed regularly happen that I did not see mentioned in the article.

    1. A number of KickStart products are just Chinese products that people in the West don't know about yet. I always found it stupid seeing products on Kickstarter that only had minor cosmetic changes from products already on Taobao and then cost a lot more.

    2. A lot of Kickstarter products are made in China. What a surprise people in the factories talk to each other and a copy is released in the Chinese market quickly and tailored for Chinese needs. Generally significantly cheaper and in Chinese. The Kickstarter project could have focused on this market as well but didn't. Not really a surprise...

    reply to this | link to this | view in chronology ]

  • identicon
    @b, 25 Oct 2016 @ 2:46pm

    Alibaba listings are not products .....yet.

    *AliExpress -- Alibaba's English-language wholesale site*

    Buy said products. See if and when they show up.

    I wager they're not at eBay levels of delivery on said promises.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Mar 2017 @ 10:58am

    Did a search for Stikbox on eBay and got hundreds of those things. If you look for "completed sales", they've sold about 580 since last June. That doesn't count sold items with a variation on the name, but it's still not as many as I thought I'd find.

    The thing about these knock-off items from China is that they are invariably flimsy and poorly made. I hope the inventor creates and sells a sturdier item and that people who liked the crappy version buy his well-made version after the crappy version has fallen apart.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: I Invented Email
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.