In China, A Growing Taste for Chic
Battle of the Brands
Given that China remains an emerging market, some companies dismiss the prevalence of fakes in the country as a minor irritation. Serge Brunschwig, chief operating officer for Vuitton, calls it "a temporary phenomenon," one that will disappear as incomes continue to rise. "People have a desire for the real thing," he said.
Some have even suggested that counterfeiting amounts to free brand-building as China's market develops. "If you're not part of the fake offering, it means you're not hot enough," said del Vecchio, Prada's commercial director for Asia, the Pacific and Japan.
But most of the major brands dismiss that sort of talk as naive.
"If the product is everywhere, how can we convince people the product is unique?" asked Marc Frisanco, deputy intellectual property counsel for the Swiss luxury group Richemont, which owns Cartier and Montblanc.
Interviews with shoppers in Shanghai and Hong Kong indicate that the easy availability of fakes is already having an effect on sales.
A media executive who splits her time between Beijing and Shanghai and earns about $80,000 a year said she no longer buys real handbags from major brands.
"I realized that the quality of counterfeit stuff is not bad at all, and the price is one-tenth of the real products," said the executive, who gave her name as Ms. Gu. "I have never felt embarrassed to carry a fake. I have good taste, and I know what is high quality and what is in. . . . It is not as if I buy this bag just because of the brand. It has to be a style I like."
Still, in a country with 1.3 billion people and a modern-day aesthetic that now tends more toward mohair than Mao suits, the fashion brands are prepared to accept a few losses in the pursuit of securing a piece of the burgeoning market.
For now, the mainland China stores are more billboard than cash register: They are building up awareness of brands and styles as incomes grow, and they appear to be funneling customers to Hong Kong, where selection is greater and prices are sharply lower thanks to tax breaks. Hong Kong has seen a flood of mainland Chinese visitors in recent years following the lifting of travel restrictions.
But Hong Kong is also a root source of the counterfeiting. Wealthy Hong Kong women bring their handbags over the Chinese border to the city of Shenzhen, where they hire skilled craftsman to duplicate them, contributing to a dramatic increase in the quality of Chinese-made fakes.
Further up the Pearl River in the city of Guangzhou, the Baiyun leather market is reputedly the largest outlet for fake handbags in the world. Sales agents preside over air-conditioned stalls with catalogues and business cards, their demeanor no different from representatives of legitimate factories at a trade show. Yet their goods are illicit: Cartier belt buckles for 50 cents, Gucci imitation leather wallets for $5, Fendi white leather bags stamped "Made in Italy," for $12.
One shop, Zhongao Leather City, offered Louis Vuitton wallets for $2.50. A sales agent said her factory could supply large volumes.
A representative from a sea freight company, Hsien Shih Co., stood nearby offering cards. Contacted by phone, a sales agent said he could arrange to ship fake products anywhere by sea by mixing them into loads of real products.
"We have friends at customs," the agent said. "Some are in charge of checking the goods, so they can make sure the goods are not checked."
Special correspondent Wang Ting in Shanghai contributed to this report.
© 2004 The Washington Post Company