It may be flattering to have your brand copied, but besides stealing from your sales volumes, counterfeits rob your brand of its valued and hard-earned integrity. Building a brand is an intensive and expensive exercise and having a successful brand takes a great deal of effort and expertise. So it’s not something you want to lose to a copycat.
Luxury lifestyle products are often the target for counterfeit fraudsters and wine is not excluded from their list. French Château wines are very popular in China. The demand is high and customers are impatient. Chinese production in general is a quick, efficient and cost-effective process. Having to wait for a vintage change or having smaller volumes than expected because of vintage conditions, is not what the Chinese wine market is used to. While it’s evolving by the minute and consumers are becoming more educated, 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 can’t resist the temptation.
The Chinese wine industry is developing and the potential is immense. Wine sales in China have grown from 3.46 billion litres in 2010 to a forecasted 5.32 billion litres for 2018, making it the sixth biggest consumer of wine globally. With such growth potential, this is a not-to-be-missed opportunity for the counterfeit business.
Although it’s unfair to all the legal business people and respectable entrepreneurs in China and given that thanks to the efforts of companies such as Baidu, Alibaba and Tencent the crackdown on 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 cheaper wine in similar bottles with similar labels. Another method is to simply label cheaper wines with the labels of more expensive ones. The copy trend with especially top-end Châteaux and Champagnes, is to reuse the original bottles and fill them with something else. These empty bottles are said to reach up to $1 000 (about R13 300) on the black market and are 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, there are copycats everywhere and it’s important to protect your brand when dealing with the international market. Taking into account all the various aspects of selling your wine abroad, from brand registration to production and distribution, I find relationships are of the essence. There are no guarantees, but surrounding yourself with the right people definitely helps to protect your brand.
Establishing trusting relationships in a foreign market is no easy task and requires research, appointing good, local legal representation and being careful. Cultural and language barriers sometimes make it difficult to understand agreements. If you’re unsure, don’t agree to or sign anything. Use your legal representative.
Register your brand. This is the first and most important step to protect your brand. Although it’s not a guarantee it won’t be copied, it’s a start and will make your legal battle that much easier. If you have international aspirations, register the brand in all the countries on your wishlist. Clever firms monitor upcoming brands and if you don’t act fast, you may find your brand has already been registered by the time 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 can’t 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.
Ecommerce has changed the world of distribution and China has the largest, most innovative ecommerce system in the world. This supercompetitive environment focuses on mobile devices, social media and digital payment. Knowing the owner of the corner store is no longer enough. When it comes to protecting your brand, a strong online presence is of the utmost importance. Chinese consumers want to buy the original and they often only buy fakes because they believe them to be the real deal. Guaranteed authenticity directly from your store is a big advantage. Alternatively work with trusted online retailers such as Alibaba.