The Fashion and Luxury Business of

China: Counterfeiting
Carrington Goins
HONR 298-701
April 7, 2009
“The most addictive substance in the world is
luxury. Once you have tasted it, nothing else
ever tastes as good.”
- Sir James Goldsmith
• http://www.youtube.com/watch?v=iIvQjDwofb
So, what is counterfeiting?

The reproduction of luxury goods

• http://www.youtube.com/watch?v=nXGHtkwk
 How To Tell If A Bag is Fake
• What you should look for:
- stitching
- quality of fabric
- embroidery
- tags
- logo
• Most fakes are found online
and sold on various sites
resulting in these sites being
sued by big companies
• Jonathan Moss, the legal
counsel for Gucci in the
U.S., says that counterfeiting
is the biggest problem for
Gucci
• http://www.youtube.com/watch?v=gLyNpo7d
• http://www.youtube.com/watch?v=ZxMhQxbU
 Who works to make these
counterfeit products?
• Parents forced to send their children to work with
increasing school fees
• Children make up almost 20% of the workforce
• They work under horrendous conditions and
sometimes are injured or die
• Most receive a fraction of the minimum wage is they
are even paid at all
• Some children are as young as 12 or 13 with shifts
that begin as early as 7:00 AM
• It is illegal for children under the age of 16 to work
• However, in state schools, as young as 7 year olds
work from 7:00 AM to dark in order to fund
undersubsidized schools
 The Story of Wang Yajuan
• Began working at the age of 14 at a textile factory in order to
help her family pay for her father’s medical bills
• She worked 7 days a week for at least 12 hours each day
• She slept in a ramshackle factory dorm with no heat during the
winter season
• She and four roommates lit a charcoal stove one night in hopes
of keeping warm while they slept, but were declared dead after
being found unconscious from inhaling the charcoal fumes the
previous night
• The factory owner ordered their bodies to be put in coffins and
cremated
• A later investigation showed that two girls were still alive when
they had been entombed
• http://www.youtube.com/watch?v=qUkjOqefw
 The Statistics
• 44.6 million 10 to 14 year olds were working a decade ago
according to the International Labour Organization
• According to a statistic, the economy loses $600 billion a year
due to counterfeit and pirated goods
• Kevin Delli-Colli, deputy assistant director of financial and trade
investigations at the U.S. Immigration and Customs
Enforcement, said that U.S. businesses alone lose between
$200 to $250 billion
• Two-thirds of fakes are produced in China
• In 2008, World Luxury Associate stated that China’s luxury
market reached U.S. $8 billion, which is 18% of the global luxury
market
• China is expected to be the largest luxury market by 2014
according to the Ministry of Commerce of the People’s Republic
of China
China’s Most Luxurious Cities
• Beijing and Shanghai
are becoming the top
cities for luxury goods
• The largest consumer
of luxury goods is
Japan followed by the
U.S.
• Ernst & Young thinks
China will surpass the
U.S. within a decade
Beijing’s New Silk Alley Market
• 5 stories
• >1,600 outlets
• Consists of fake name-
brand clothing, leather
goods, watches and
jewelry
• Among the most
popular brands are:
- Burberry
- Chanel
- Gucci
- Louis Vuitton
- Prada
 Beijing 2008 Luxury Summit

• A conference that focuses on China’s luxury market that focuses on the

following topics:
- China’s role in the world luxury market
- China’s strategy
- Interpretation of China’s luxury consumption
- What is happening in branding
- The magic formula of luxury fashion
- Counterfeiting and brand protection in China
 Counterfeiting on the Rise
• It is illegal to make counterfeit goods in
China, but they may be exported
• It is hard to enforce laws due to a lack
of resources
• Counterfeiting undermines the identity
and quality of name brands
 References
• http://www.fakesareneverinfashion.com/conte
• http://www.shemii.com/partner/BJLux2008.pd
• http://www.wikihow.com/Tell-if-a-Designer-Ba
• http://www.youtube.com/watch?v=
iIvQjDwofbI