There might be something flattering about having your brand copied, but other than stealing from your sales volumes, counterfeits take your valued and hard-earned brand integrity. Building a brand is an intensive and expensive exercise and having a successful brand is evidence of a lot of effort and expertise. Not something you want to lose to a copycat.
Luxury lifestyle products are often the target for counterfeit products and wine is not excluded from the list. French Châteaux wines are very popular in China. The demand is high and customers impatient. Chinese production in general is a very quick and efficient, as well as cost-effective process. Having to wait for on a vintage change or having smaller volumes than expected because of vintage conditions, are not what the Chinese market is used to. Of course, the Chinese wine market is evolving by the minute and consumers are getting more educated, but running out of a popular brand is a nightmare. Of course not everyone with stock issues resorts to counterfeit products, but there are some that cannot resist the temptation.
The Chinese wine industry is developing and the potential is immense. Growing from 3.46 billion litres in 2010, the forecast is that 5.32 billion litres of wine will be sold in China in 2018. It makes China the sixth biggest consumer of wine globally. With such growth potential, of course the counterfeit business will not stay behind.
Although it is very unfair to all the legal business people and respectable entrepreneurs in China and given that with the efforts of companies such as Baidu, Alibaba and Tencent enforcement of copyright infringement is improving, the country is still regarded as the capital of copies. Also when it comes to wine. Some wine brands are reproduced by bottling a different, cheaper, wine in a similar bottle and label. Another way of copying wine brands is by simply relabelling cheaper wines with the labels of more expensive ones. The copy trend with especially top-end Châteaux and Champagnes, is to reuse the original bottle, filling it with something else. Such empty bottles are said to reach up to $1000 on the black market, being refilled, recorked and resold to unsuspecting customers. According to Forbes.com the Inter-professional Council of Bordeaux Wine “boldly estimates that 30,000 bottles of fake imported wine are sold per hour in China.”
While China is an easy suspect, copycats are all-over and it is very important to protect your brand when dealing in the international market. Considering all the different aspects from brand registration to production and distribution, I find that relationships are of the essence. There are no guarantees, but surrounding yourself with the right people definitely helps when you want to protect your brand.
Establishing trusting relationships in a foreign market is no easy task, but do your research, appoint good, local legal representation and be careful. Cultural and language barriers sometimes make it difficult to understand agreements. If you are not sure, do not agree to or sign anything. Use your legal representative.
Register your brand. It is the first and most important step. Although not a guarantee that you will not to be copied, it is a start and will make your legal battle just so much easier. If you have international aspirations, register the brand in all the countries on your wish list. Clever firms monitor upcoming brands and if you do not act fast, you might find your brand already registered when you apply. This is a clever trick, forcing you to either let it go or buy it back.
Stay involved with your brand. The biggest mistake you can make is to trust someone else with your brand. No one else will look after this asset as well as you do. You cannot sell the wine to an agent or importer and sit back. Know where and how and at what price your brand is selling. Being involved down the distribution line will quickly show you who you can trust and where the dangers are.
E-commerce has changed the world of distribution and China has the largest and most innovative e-commerce system in the world. This super competitive environment focuses on mobile devices, social media and digital payment. Knowing the owner of the corner store is not enough anymore. When it comes to protecting your brand, a strong online presence is all-important. Chinese consumers want to buy the original and they often only buy fakes believing them to be the original. Guaranteed authenticity directly from your store will be a big advantage, otherwise work with trusted online retailers such as Alibaba.
This article originally appeared in WineLand, August 2018