China, to put it politely, has an intellectual-property problem. Knockoff Nike shorts, Chloe bags and Diesel tops hang in full view in shops in big cities. Even alcohol is heavily counterfeited, and savvy drinkers know to avoid the second bottle in a buy-one-get-one-free whiskey promotion.
|P.T. Black is a partner in Jigsaw International, a Shanghai boutique lifestyle-research agency that looks at the direction of change in China.|
Brands are taking all sorts of steps to outsmart counterfeiters. LVMH regularly raids factories. Police occasionally sweep the streets clear of CD vendors. Chivas Regal has launched a massive anticounterfeit campaign, highlighting eight new bottle features that distinguish real from fake.
The solution lies, of course, in the people. Growing up surrounded by piracy and knockoffs, Chinese youth take much of it for granted. Buying a fake is just one of many options to consider -- except in the case of DVDs, where only a portion are legally available. For kids, piracy is too universal to be an ethical question. Instead it is simply a question of budget and quality.
Increasingly it is the demand for quality that is turning people away from fakes. Rare is the urban teen who would go outside in fake basketball sneakers -- not for fear of being found out but because the shoes might fall apart in front of his friends. For the young college graduate, buying her first working purse is an important sign of independence -- and she doesn't want the zipper to break.
In the pursuit of quality, young people increasingly are looking to smaller brands that fly under the pirates' radar. It's hard for an amateur to tell if an Adidas bag is real or not, but who's going to bother pirating a niche brand such as Insight or Deus? Whereas your Chivas may well be fake, your Glenlivet is probably real.
It's a race between pirates and consumers, with the broad-appeal brands suffering the fallout. Of course there is a certain pleasing irony to brands such as the newly launched H&M having to deal with piracy. In the meantime, keep your eyes on your eggs.