Counterfeit goods losing attraction
The mainland's reputation as the home of fake goods may be coming to an end as increasingly savvy consumers demand the real thing.
Licensing agents for global brands said the threat from fake goods had declined in recent years amid surging demand for genuine goods and co-operation between mainland and overseas merchandisers.
Agents such as Hasbro and Promotional Partners Worldwide (PPW), which help put images of popular film and cartoon characters on mugs, apparels and stationery, said fake goods had not thwarted their advance into the mainland retail market. Big department stores and e-commerce platforms had become helpful partners in pulling phony products off their shelves.
PPW said fake goods would be marginalised as more mainland consumers craved authentic products.
'There will always be a market for fake goods, but demand for authentic products is clearly on the rise,' said PPW's senior licensing manager, Jennifer Chan.
While there have been complaints of fake goods being sold on Taobao, the mainland's largest online shopping platform, its commercial engine Taobao Mall requires online vendors to submit valid trademarks and copyright details of brand items being sold.
According to the Trade Development Council, China's market for licensed goods rose 9 per cent to US$3.1 billion in 2009 when sales in the world's largest licensed goods market, the United States, shrank 11 per cent. More Chinese manufacturers, fast-food chains and apparel retailers are seeking to put their images on their products.
Boshiwa, a mainland brand of children's clothing, and milk-product producer Mengniu, for example, are discussing with PPW the use of some of its licensed figures on their products.
Wennie Wong, a business development manager at Hasbro - a licensing agent for US cartoon characters Transformers and Smurfs - said they were receiving more inquiries from stationery factories about putting the figures on pencils and erasers.
Raymond Ip, an assistant executive director of the TDC, said more mainland consumers were after genuine brands.
'In 2009, a mainlander spent an average of just US$2.33 on licensed merchandise compared to about US$40 in Hong Kong. Imagine how big the growth will be if China catches up with Hong Kong on such purchases?' he said.
Raymond Choy, the designer of a popular cartoon bear called Qee, said licensing was a business tool that every designer and artist should be familiar with.
'If I hadn't explored the area, my creation would not appear on Donna Karan outfits, or adidas, or LeSports,' Choy said.
By licensing the bear to different merchandisers - including Mercedes Benz - Choy has made tens of millions of dollars in royalties.
He hoped licensing could more than double and make up 40 per cent of his business next year. 'The gross profit of selling a licensed product could be three times its cost,' he said.
More than 170 licensing agents of original jewellery, fashion and toy brands will exhibit their products in a three-day show hosted by the TDC starting on Monday.