Would you buy a fake Ferrari? The challenge confronting business
October 17, 2014
By Helen Knap
We have all heard the stories about fake products coming out of China – but lately things have gone to new extremes. When I first arrived in Asia a decade ago there was no shortage of Rolex watches and Polo shirts but even when you felt them or put them on there was a definite air of fake about them. They just didn’t feel right!
What are these new extremes? What about the Hyatt Hotel spelt “Hiaytt” in Guangdong that looked like the famous hotel brand with sign being an exact replica – but wait, no its not. It looked the same, felt the same but the whole thing was a front. Now, that’s not to say the quality was bad but when you peered behind the curtains there was some concern that the hotel was made out of Lego bricks (which could have been faked)!
Then there is the example that the BBC’s Top Gear posted on their Facebook page of a fake Mazda. Fan Jimmy Lai commented that "Guys, do you know how expensive cars are in China? $50,000 for a basic Mini. Copy of Mini costs $8000 with navigation, leather. Real Smart, $22,000. Fake, $6000.” He went on to say "Your choice. When you're 22-30 years old, with annual income $8000, what car would you buy?"
He had a point. But how do you respond when you come across a Ferrari that you can buy on the streets of Shanghai for $10,000? Armed with a photo of a vintage 330P4 Ferrari told the EU that only four 330P$s were made in 1967 and the one last seen in Shanghai was a fake but they suspect the car came from Thailand originally.
Then there is the story of the popular Hong Kong restaurant Chachawan Isaan Thai and Bar. One morning co-founder Yenn Wong woke up to find some photos in the inbox from a friend who, quite literally, could not believe their eyes. Here in Shanghai was almost an exact replica of the Hong Kong resteraunt bearing the same name. It kind of takes franchising to a new low when not even the original brand owner knows that someone else has pulled a fast one.
Wong told CNN that "It is extremely disappointing to see the restaurant in China has used not just the Chachawan name, but also our exact logo and font which was designed specially for us,"
So what can you do to mitigate your risks when it comes to the potential for someone else to come a long and rip you off?
Make sure you consider the following:
As much as possible always consider trademarking and copyrighting your brand and materials
Always ensure that where a patent is developed that you understand how to enforce it
Speak to your insurers about whether or not there is coverage for the potential of such risks especially if you are operating in Asia
The reality is there is not much more you can do – at the end of the day some may even say it is a compliment for someone else to replicate your brand – it must mean you’ve made it. But therein lies in the problem. Countefieting is not just a problem when it comes to big business it impacts small business just the same with the added difference being the amount of money involved can send a smaller company to the wall.
The even bigger challenge is when you realise that in order for these people to have a business there must be demand for cheap fakes. As the Top Gear fan pointed out "Your choice. When you're 22-30 years old, with annual income $8000, what car would you buy?"
Author Helen Knap is social affairs reporter for EntreHub
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