Some branded products produced by Chinese factories are surprisingly similar in appearance to the global luxury brand products for which they are OEMs.

Hong Kong, China’s shift to Made in China and Designed in China is driving the pace of economic development, but manufacturing still occupies a more important position on China’s economic development balance sheet than the fledgling creative economy. Location.

In recent years, China's manufacturing industry has been hit by factors such as slowing global demand and the migration of procurement centers to cheaper Southeast Asia. Factories with highly skilled labor cannot receive enough work, so factory owners who are suppliers to major luxury goods companies have come up with a solution: create their own brands.

Most of these manufacturers do not make high-quality replicas of "original orders", the so-called "factory surplus orders". This is what Alibaba Chairman Jack Ma said in a recent interview, which caused controversy, so-called "same as genuine" products. Good fake?. But in some cases, Chinese factories produce products under other brands that look very similar to the products they produce for Western customers. Sometimes the origins of these brands are quite shady. They made such changes to protect themselves, said Gerhard Flatz, general manager of KTC, a high-end sportswear manufacturing company in China. Manufacturing is moving to other regions. In order to survive, factories feel they have to do something they have never done before. Of course, doing such a business will bring many problems, but the factory is currently in a difficult situation. This is a tough battle and they have nothing to fear losing. ?

Build your own brand

Take the leather goods brand Tuscan?s as an example. The brand is produced by Times Group (Sitoy) in Guangdong Province, China. Times Group also owns Michael Kors, Prada, and Tumi and other brands produce products. Tuscan?s claims to be from Florence, Italy in its marketing, but since Times Group owns trademark licenses in almost all major global fashion markets outside Europe, its operating model in the past five years has been more like a Chinese brand.

Times Group now designs Tuscan?s handbags in its manufacturing base in Dongguan, and has a huge retail network of single-brand stores and department store counters across the country from Chongqing to Ningbo. The bag itself, for its relatively low price, is of high quality (it costs about $150, while an equivalent designer bag would cost at least $1,500) and clearly carries the Tuscan's brand. But there are similarities between some of the styles and international brands. For example, Tuscan's Gem series handbags: stiff and square, with handles on the top, pocket flaps, gold hardware details and leather and chain straps, the shape and features are similar to Michael Kors' Bridgette handbags.

CocoMojo, a young Hong Kong accessories brand, provides another completely different example. CocoMojo operations are supervised by Wendy Mak, the daughter of an important figure in China's manufacturing industry. For many years, her family's leather goods factory has been located in the Pearl River Delta area and has produced products for Marc Jacobs, Prada and Coach for many years. CocoMojo's handbags are mostly made of bright marble leather and multi-colored shiny leather products, but in terms of their silhouette, they are strikingly similar to Coach's "Eddie" style lazy shoulder bag and other famous luxury brand products. But unlike Tuscan?s, Coco Mojo seems to be a small personal project of Mai Shiyun, who is also the most likely to one day inherit her father's leather goods empire. Still, if done successfully, it could be a way for her to diversify her family business and move up the value chain.

But despite some "derivative" designs, the two factory brands are essentially indistinguishable from Europe's major high street brands, which market their production and luxury collections under the slogan "buy the same at low prices" Similar products are occasionally criticized for plagiarism. After all, both business models emphasize different interpretations of the colorful spectrum from original designs, slightly modified derivative designs, to blatantly copied fakes.

Inspired or directly imitated?

But if a similar design comes from a factory or manufacturer that also produces for international big names, will Western brands be affected by their own production partners? Directly threatening their own business and causing displeasure? Will it be easier for them to ignore this problem: the niche groups served by these "factory brands" cannot afford top-level luxury goods and usually do not have much interest in "original orders"?

As long as the designs of these factory brands do not legally infringe on the interests of factory customers, many European and American brands seem to turn a blind eye to these legal operations. But many believe luxury brand executives are secretly dissatisfied with the copycat-style products being spread by Chinese factories and other manufacturers. What the brand is essentially worried about most is that because these classic bags also constitute the brand itself, such behavior will cause brand dilution, said Liz Flora, editor-in-chief of JingDaily, a marketing research company. The company earlier this year At that time, the groundbreaking report "China's Online Gray Market and Counterfeits" was released. ?Though so far, only top brands such as Herm?s are unaffected. On the one hand, Birkin Bags are everywhere on Taobao, and on the other hand, we have just witnessed the auction price of an authentic Birkin bag breaking a world record in Hong Kong. ?

Others in the industry express more understanding and sympathy for the factory brand. Some people simply view this phenomenon as a natural and clever response to increasing profit margins in a rapidly changing market. All companies need to consider how to sustain and achieve growth in the future, said Jason Leung, director of sales agency TheAlphabet in London, who is responsible for liaising with manufacturers in Greater China. ?I have encountered some Chinese factories that, while OEM for global luxury brands, also have their own brands, mainly targeting the domestic market. But starting their own brand allows them to have stricter control over their revenue, [because] if they only rely on one or two luxury brands, their revenue will be greatly affected by the business development of these brands. ?

This uncertainty explains why many major Chinese textile and apparel factories appear to be transitioning from original equipment manufacturers (OEMs) to original design manufacturers (ODMs). The former means that they are only responsible for producing already designed products or manufacturing components for other companies; the latter completes the entire design process in-house. The growth of white label business

Some factories that are beginning to play a new role as ODM are trying to adopt a different approach from Times Group: instead of turning to creating their own brands, they design and produce the entire series, sold to other companies who then put their own brand labels on the merchandise. This is a well-known and fast-growing phenomenon in the industry, now known as "White-Labelstrategy". I was at the Hong Kong Fashion Week exhibition and was surprised to see that the people on the booth were not emerging creative designers, but Chinese factories with various product lines. The collections were designed in factories that previously only produced clothes for global brands, said Susanna Soo, owner of Hong Kong fashion brand S.Nine. "I was actually impressed by the design and high quality of the products they offered." I can also understand why the factory has reached this point, because from what I understand, they are in a very difficult situation now. ?

The main reason is rising costs. According to data from the Boston Consulting Group, wages in mainland China have almost tripled in the past 10 years. This, coupled with higher energy losses and logistics costs, means that local factories in China have long lost their former attractiveness in terms of economic costs. . Both Western and Chinese brands have moved product manufacturing to countries such as Bangladesh, India, and Indonesia. On top of this, Chinese factories have to face the slowdown in domestic and European economic growth.

In an effort to improve the products they offer, some factories are trying to recruit talented designers. Li Na, a fashion designer who has shown at the Mercedes-Benz China Fashion Week, has publicly stated that a factory has approached her to create a brand series for her. Factories that have traditionally produced only pre-designed clothes for Western high street brands are now looking to update their business models. During their conversation, the factory owners explained that they became interested in Li Na because they felt pressure from the local community and, interestingly enough, the government to have their own brand with an original aesthetic.

Opportunities for skill upgrading and quality upgrading

Although it is difficult not to have a subconscious negative reaction to the so-called factory brand phenomenon, the increase in the number of these factory-operated brands may not only have a negative impact on End customers also benefit all parties in the industry. Counterfeiting and piracy are still big problems for China's manufacturing industry, but if factories can get rid of mindless design, they may be able to find a way out with an unexpectedly strong position. Ultimately, factories are in a better position than most brands, Flatz said, because they have highly skilled workers who know how to make products that are both affordable and beautiful. This is why KTC intends to adopt a different strategy than before. We are ending partnerships with some brands and joining forces with young designers. This is the way forward. ?

The factory has been working hard to meet the strict standards of international brands for many years. Now it can hire most young Chinese designers with overseas education background, coupled with a strong marketing team, it can provide highly competitive products. Prices offer original, high-quality clothes.

But it is still naive to think that factory brands are a powerful combination of creativity and economic results. While there will be isolated cases, observers believe a more immediate solution would be for Western brands and Chinese factories to take a serious look at their current working practices.

Jason Leung said that to do business in China, the importance of interpersonal relationships is more important than in the West, so if luxury brands cultivate these relationships and provide more incentives or investment opportunities, factory owners will feel better in the future. Uncertain reduction. Because the root of this phenomenon is the uncertainty of the future. If you are familiar with Chinese people, they can wear the same pants as you; if the relationship is not good, they will squeeze you. "It's that simple," says Jing Daily's Flatz. ?