AUGUST 3, 2011Made in China: Fake Stores
By LAURIE BURKITT And LORETTA CHAO
Imitators Offer Own Versions of IKEA, Dairy Queen Down to the Tiniest Details
=================================================================
=================================================================
BEIJING—In China's "fake world," consumers can shop for furniture at an imitation IKEA store, eat a six-inch sandwich at an outlet strikingly similar to Subway, and then grab dessert at "Dairy Fairy"— where they might knock back an Oreo-flavored "Ice Storm" whose, thick, creamy texture takes unabashed inspiration from the famous Dairy Queen "Blizzard."
Real or Fake?
Which is the original and which is the imitator? Scroll to the end of the article for answers.
View Full Image
Reuters
A
View Full Image
Getty Images
B
View Full Image
Bloomberg News
C
View Full Image
Bloomberg News
D
View Full Image
Reuters
E
View Full Image
Melissa Powers for The Wall Street Journal
Welcome to the modern era of copying in China, in which sophisticated proprietors of knockoff stores and chains are targeting increasingly sophisticated Chinese consumers with store experiences and customer service extremely similar to the real thing, down to the helpful store maps, coupons, shopping bags and employee uniforms.
The imitation retailers and restaurants go beyond the simple fakes of consumer goods that have long been abundant in China. Indeed, in some cases, they aren't even selling fake goods: the phenomenon gained global attention last month when a foreign blogger in the southwestern city of Kunming posted photos of a fake Apple Store selling real iPads and iPhones in a setting remarkably similar to Apple Inc.'s trademark retail outlets, and identifying itself as an Apple Store without the U.S. company's permission.
Imitation retailers and restaurants aren't new in China, but analysts and executives say they have proliferated in recent years. The trend reflects growing awareness of the importance of things like design and customer experience among entrepreneurs in China, where people long ago perfected the art of making imitation goods but where companies have been less successful building their own consumer brands, said Wei Xiaopo, an analyst at CLSA Asia-Pacific Markets.
"Chinese companies know that service and experience have become among the most critical parts of branding for businesses that operate in China," said Mr. Wei.
While China is hardly the only country to have problems with commercial fakery, what happens here now matters enormously for multinational companies, because China is the world's most important growth market for consumer goods. Retail spending is expected to reach 27.4 trillion yuan ($4.3 trillion) by 2015, up by more than two thirds from the level last year, according to the Chinese Academy of Social Sciences, a government think tank.
China's government has acknowledged problems with piracy, and has taken measures to address it that some foreign executives and experts say are starting to make headway. After the fake Apple Store was highlighted last month, Kunming officials initiated a sweeping inspection of electronic stores in the city. It's unclear whether they have taken any action against the Apple store, whose staffers now refuse to answer queries over the phone.
The fake stores present new complications for global companies that have long struggled to protect their brands in China. Some executives say that fake stores can help build brand awareness. And in cases of unauthorized resellers like the Apple store in Kunming, the foreign company is still benefiting from sales of its own products.
Alexander Moody-Stuart, managing director at sandwich chain Subway, said the number of imitators that come to franchising fairs in China increases every year. He said there are Subway copiers that use similar logos, offer sandwiches in six-inch and 12-inch formats as Subway does (China generally uses the metric system), and even accept coupons from Subway when consumers confuse the two stores.
For Subway, which is trying to build awareness to a type of food that isn't always eaten in China, "the mimicking isn't exactly a bad thing," Mr. Moody-Stuart said.
But the imitation stores also limit the companies' ability to control the experience that consumers have with their brands. Copycat companies run the risk of tarnishing a consumer's association with an already established brand at a time when Chinese consumers are increasingly brand-conscious. Apple, for example, wasn't able to oversee the service or hire the employees at fake stores like the one in Kunming the way it does painstakingly at its own outlets. Walt Disney Co. has similar difficulties: a number of "Disney Stores" are open in China, even though the U.S. company hasn't yet launched its trademarked chain of stand-alone retail shops in the country—although it does license its products for sale in the Chinese market.
Spokeswomen for Apple and Disney in China declined to comment.
Suddenly, one of the most famous Apple stores in the world is one that not only isn't a real Apple Store, but apparently isn't even an authorized Apple reseller.
Copycat stores range from small regional operations, such as 11 Furniture, which runs two stores, to larger Dairy Fairy-type national franchises. To some degree, the copycat stores illustrate that there's demand that's not being met, because some foreign companies haven't expanded into huge swaths of China's interior, said Torsten Stocker, a Hong Kong analyst for Cambridge, Mass., consulting firm Monitor Group.
Apple, for example, has only four of its stores in China—in Beijing and Shanghai—though it licenses resellers elsewhere in the country. Swedish furniture giant IKEA Group hasn't yet expanded into China's far western cities like Kunming, where a Chinese company called 11 Furniture is mirroring IKEA's store marketing strategy—everything from its blue-and-yellow colors and in-store room displays to special golf pencils and crinkling plastic bags.
Copycat Stores
View Slideshow
Reuters
A fake Apple Store in Kunming, China
A Fake Apple Store
View Slideshow
Getty Images
Chinese authorities launched an investigation of electronics stores after media reports said one retail outlet seemed to be copying Apple's store format, down to employees in logoed blue shirts—two of whome are seen here consulting an iPad Friday.
Just like IKEA does, 11 Furniture uses blue signs and yellow arrows on the floor to direct consumers through mock living rooms, where sofas sit opposite flat screen TVs and tables that look like they should have names like Folkvik and Liatorp (instead of Shuwei Kela Chaji).
A spokeswoman in China for IKEA, which has nine stores in China and plans to open 12 more, said of 11 Furniture that "IKEA is not aware of copyright infringement."
Not everything is knockoff in imitation outlets. At Dairy Fairy, a national franchise chain that opened in 2008, ice cream, including the Blizzard-like "Ice Storm," is served upside-down, just like at Dairy Queen, which has 360 stores in China. Cups are marked with "DF" in red and blue, resembling the colors Dairy Queen uses and its "DQ" nickname. Dairy Fairy employees are donned in blue uniforms with red aprons—nearly a mirror image of Dairy Queen employees. But at a Dairy Fairy in Beijing on Tuesday, the menu also included items that one wouldn't find at a DQ, such as spicy-pepper-flavored ice cream.
Dairy Fairy declined to comment and didn't offer details on the number of stores it operates in China. Dairy Queen vice president of international marketing Justin Holtkamp said the company isn't aware of Dairy Fairy, but that it has other imitators, who just use the company's name or call it "Dairy & Queen." Dairy Queen has shut down two stores that infringed its trademark within the last year, he said.
Bloomberg News
The Apple logo was covered up recently at a fake store in Kunming.
Some proprietors say their company's similarity to known brands is a coincidence. At Jambo Juice in Beijing, where smoothies are made on-the-spot so consumers can add so-called energy boosters and opt for antioxidants, the green signs and tropical colors are familiar to anyone who has ever patronized U.S.-based chain Jamba Juice, which doesn't have outlets in China.
But Jambo's founder, Ye Jiabin, says he got the English name from an African language (it is a greeting in Swahili), and is now considering changing the name because it is too similar to the U.S. company. "We've just always put more emphasis on the Chinese name"—which is Jiang Bao—he said.
Still, the scale of some examples is startling. In Changzhou, Jiangsu Global Digital Cultural Theme Park Co. has opened a park called Global Animation Joyland, which bloggers have called attention to because it includes a section that appears to be based on Activision Blizzard Inc.'s World of Warcraft massive multiplayer online game.
Activision Blizzard said it hasn't licensed the use of its intellectual property to Joyland or any other theme park, and is "actively looking into the situation." The Chinese version of World of Warcraft, operated through a licensing agreement by Chinese Internet company Netease.com Inc., is one of the most popular online games in China. Netease didn't respond to requests for comment.
Joyland, a park that opened with blessings from local officials, also includes licensed sections devoted to other brands including "Mo'er Manor," based on an online community for children by New York Stock Exchange-listed Taomee Holdings Ltd., and a store carrying official merchandise of Walt Disney Co.
The theme park company declined to comment.
================================================
online.wsj.com/article/SB10001424053111904292504576484080863377102.html#ixzz1TvUZ7U9a
Real or Fake?
Which is the original and which is the imitator? Scroll to the end of the article for answers.
View Full Image
ReutersA
View Full Image
Getty ImagesB
View Full Image
Bloomberg NewsC
View Full Image
Bloomberg NewsD
View Full Image
ReutersE
View Full Image
Melissa Powers for The Wall Street JournalWelcome to the modern era of copying in China, in which sophisticated proprietors of knockoff stores and chains are targeting increasingly sophisticated Chinese consumers with store experiences and customer service extremely similar to the real thing, down to the helpful store maps, coupons, shopping bags and employee uniforms.
The imitation retailers and restaurants go beyond the simple fakes of consumer goods that have long been abundant in China. Indeed, in some cases, they aren't even selling fake goods: the phenomenon gained global attention last month when a foreign blogger in the southwestern city of Kunming posted photos of a fake Apple Store selling real iPads and iPhones in a setting remarkably similar to Apple Inc.'s trademark retail outlets, and identifying itself as an Apple Store without the U.S. company's permission.
Imitation retailers and restaurants aren't new in China, but analysts and executives say they have proliferated in recent years. The trend reflects growing awareness of the importance of things like design and customer experience among entrepreneurs in China, where people long ago perfected the art of making imitation goods but where companies have been less successful building their own consumer brands, said Wei Xiaopo, an analyst at CLSA Asia-Pacific Markets.
"Chinese companies know that service and experience have become among the most critical parts of branding for businesses that operate in China," said Mr. Wei.
While China is hardly the only country to have problems with commercial fakery, what happens here now matters enormously for multinational companies, because China is the world's most important growth market for consumer goods. Retail spending is expected to reach 27.4 trillion yuan ($4.3 trillion) by 2015, up by more than two thirds from the level last year, according to the Chinese Academy of Social Sciences, a government think tank.
China's government has acknowledged problems with piracy, and has taken measures to address it that some foreign executives and experts say are starting to make headway. After the fake Apple Store was highlighted last month, Kunming officials initiated a sweeping inspection of electronic stores in the city. It's unclear whether they have taken any action against the Apple store, whose staffers now refuse to answer queries over the phone.
The fake stores present new complications for global companies that have long struggled to protect their brands in China. Some executives say that fake stores can help build brand awareness. And in cases of unauthorized resellers like the Apple store in Kunming, the foreign company is still benefiting from sales of its own products.
Alexander Moody-Stuart, managing director at sandwich chain Subway, said the number of imitators that come to franchising fairs in China increases every year. He said there are Subway copiers that use similar logos, offer sandwiches in six-inch and 12-inch formats as Subway does (China generally uses the metric system), and even accept coupons from Subway when consumers confuse the two stores.
For Subway, which is trying to build awareness to a type of food that isn't always eaten in China, "the mimicking isn't exactly a bad thing," Mr. Moody-Stuart said.
But the imitation stores also limit the companies' ability to control the experience that consumers have with their brands. Copycat companies run the risk of tarnishing a consumer's association with an already established brand at a time when Chinese consumers are increasingly brand-conscious. Apple, for example, wasn't able to oversee the service or hire the employees at fake stores like the one in Kunming the way it does painstakingly at its own outlets. Walt Disney Co. has similar difficulties: a number of "Disney Stores" are open in China, even though the U.S. company hasn't yet launched its trademarked chain of stand-alone retail shops in the country—although it does license its products for sale in the Chinese market.
Spokeswomen for Apple and Disney in China declined to comment.
Suddenly, one of the most famous Apple stores in the world is one that not only isn't a real Apple Store, but apparently isn't even an authorized Apple reseller.
Copycat stores range from small regional operations, such as 11 Furniture, which runs two stores, to larger Dairy Fairy-type national franchises. To some degree, the copycat stores illustrate that there's demand that's not being met, because some foreign companies haven't expanded into huge swaths of China's interior, said Torsten Stocker, a Hong Kong analyst for Cambridge, Mass., consulting firm Monitor Group.
Apple, for example, has only four of its stores in China—in Beijing and Shanghai—though it licenses resellers elsewhere in the country. Swedish furniture giant IKEA Group hasn't yet expanded into China's far western cities like Kunming, where a Chinese company called 11 Furniture is mirroring IKEA's store marketing strategy—everything from its blue-and-yellow colors and in-store room displays to special golf pencils and crinkling plastic bags.
Copycat Stores
View Slideshow
ReutersA fake Apple Store in Kunming, China
A Fake Apple Store
View Slideshow
Getty ImagesChinese authorities launched an investigation of electronics stores after media reports said one retail outlet seemed to be copying Apple's store format, down to employees in logoed blue shirts—two of whome are seen here consulting an iPad Friday.
Just like IKEA does, 11 Furniture uses blue signs and yellow arrows on the floor to direct consumers through mock living rooms, where sofas sit opposite flat screen TVs and tables that look like they should have names like Folkvik and Liatorp (instead of Shuwei Kela Chaji).
A spokeswoman in China for IKEA, which has nine stores in China and plans to open 12 more, said of 11 Furniture that "IKEA is not aware of copyright infringement."
Not everything is knockoff in imitation outlets. At Dairy Fairy, a national franchise chain that opened in 2008, ice cream, including the Blizzard-like "Ice Storm," is served upside-down, just like at Dairy Queen, which has 360 stores in China. Cups are marked with "DF" in red and blue, resembling the colors Dairy Queen uses and its "DQ" nickname. Dairy Fairy employees are donned in blue uniforms with red aprons—nearly a mirror image of Dairy Queen employees. But at a Dairy Fairy in Beijing on Tuesday, the menu also included items that one wouldn't find at a DQ, such as spicy-pepper-flavored ice cream.
Dairy Fairy declined to comment and didn't offer details on the number of stores it operates in China. Dairy Queen vice president of international marketing Justin Holtkamp said the company isn't aware of Dairy Fairy, but that it has other imitators, who just use the company's name or call it "Dairy & Queen." Dairy Queen has shut down two stores that infringed its trademark within the last year, he said.
Bloomberg NewsThe Apple logo was covered up recently at a fake store in Kunming.
Some proprietors say their company's similarity to known brands is a coincidence. At Jambo Juice in Beijing, where smoothies are made on-the-spot so consumers can add so-called energy boosters and opt for antioxidants, the green signs and tropical colors are familiar to anyone who has ever patronized U.S.-based chain Jamba Juice, which doesn't have outlets in China.
But Jambo's founder, Ye Jiabin, says he got the English name from an African language (it is a greeting in Swahili), and is now considering changing the name because it is too similar to the U.S. company. "We've just always put more emphasis on the Chinese name"—which is Jiang Bao—he said.
Still, the scale of some examples is startling. In Changzhou, Jiangsu Global Digital Cultural Theme Park Co. has opened a park called Global Animation Joyland, which bloggers have called attention to because it includes a section that appears to be based on Activision Blizzard Inc.'s World of Warcraft massive multiplayer online game.
Activision Blizzard said it hasn't licensed the use of its intellectual property to Joyland or any other theme park, and is "actively looking into the situation." The Chinese version of World of Warcraft, operated through a licensing agreement by Chinese Internet company Netease.com Inc., is one of the most popular online games in China. Netease didn't respond to requests for comment.
Joyland, a park that opened with blessings from local officials, also includes licensed sections devoted to other brands including "Mo'er Manor," based on an online community for children by New York Stock Exchange-listed Taomee Holdings Ltd., and a store carrying official merchandise of Walt Disney Co.
The theme park company declined to comment.
================================================
online.wsj.com/article/SB10001424053111904292504576484080863377102.html#ixzz1TvUZ7U9a
No comments:
Post a Comment