Thriving market of fakes
Not just Indian companies but every big and small company which makes a product with good demand is sure to see a counterfeit or fake me-too product very soon. And in all likelihood, it is almost always made in China. Yes, China is known world over for its excellent manufacturing abilities due to easy availability of resources, economies of scale and more importantly, talented pool of workers. This makes China most alluring for companies seeking to set up manufacturing base. But the big risk is immediate production of fake goods.
This tantamount to stealing intellectual property and according to US International Trade Commission, American companies in intellectual property-intensive businesses reported losses of approximately $48.2bn in sales, royalties, or licence fees due to infringement in China in 2009. Illegitimate Apple stores, fake Disney Theme parks, 11-Furniture which is entirely Ikea, except for the name. There are ongpiong cases on scores of fake Starbucks in China, including One Dollar Coffee, Seayahi Cofee, Lucky Coffee, Bucksstar Coffee and more. KLG which is an exact replica of KFC or Nibe which is ditto Nike; there are even Harry Potter fakes!
And companies are taking various measures to at least try and clamp this booming business of fake products. installing cameras, to ensure there are no information leaks or overproduction at its factories, is the most popular method being used. Others are trying to split up the entire manufacturing process so that no one manufacturing unit knows the entire process. And wherever there is assembly of products, companies are splitting up components among different suppliers and manufacturers, to ensure no one company has all the required parts to sell a complete product. But the best way to stay ahead is to keep giving excellent quality, which in itself will demarcate itself from the counterfeit. Yes, innovating faster than the fakes is the way to stay ahead in China. It would be much better to spend money on innovation rather than on a losing battle on legal suit to fight the counterfeits.