The Shanzhai Index: Yeezy and New Balance Fakes Pop Up in China

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One giveaway that the new Yeezy store in Wenzhou, China is an imposter isn’t just the dodgy “Weezy”-branded sneakers lining its shelves. Check out the store’s neighbor — an athletic apparel shop named “New Bunren” with a suspiciously similar logo to New Balance. Cue the latest rage in Western-branded China fakes.

The fake Yeezy store saga is making headlines in fashion circles for its preposterousness. But this isn’t the first fake bricks and mortar outlet in China. Not by a long shot. It’s a phenomenon that’s a backhanded, black market tribute to the brands being knocked off, even as they play whack-a-mole to shut them down.

News spread fast about Wenzhou’s Yeezy fashion knock-off, ripping off the line designed by musician Kanye West for adidas. Less mentioned next to the Yeezy shop was the “New Bunren” store, a clear knock-off of athletic brand New Balance. New Bunren should maybe think about its life choices following a ruling by Chinese authorities that New Boom violated New Balance’s China trademark. The court awarded New Balance $1.5 million in damages.

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The counterfeit phenomenon of recreating brands’ goods and retail presence is known in China as “shanzhai,” a term originally coined to describe knock-off mobile phones. China is especially fond of shanzai automobiles, electronics and athletic brands. The Jordan brand’s adventures in China to protect its brand against rival “Qiaodan” (the phonetic pronunciation of “Jordan”) is legendary. But there is also a China Shanzhai Index that says something about China’s hottest brands.

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The explosion of fake New Balance stores and products in China has a bright side, of sorts. It means the brand—long largely unknown to China’s consumers—is gaining in popularity. The boom-in-fakes lifecycle of foreign brands in China is well established. Seven years ago, Apple was struggling to close dozens of prominent fake Apple stores across the mainland as the popularity of the iPhone and other iOS devices in China exploded.

A proliferation of counterfeit stores and products is often a sign a brand is growing strong in China and those who cannot afford the real deal are making do with shanzhai. But the index also suggests that as the popular brand expands into the nation and makes itself more available, some portion of the shanzhai buyers will switch to the real thing.

The recent proliferation of New Balance knock-offs in China (see our gallery in this article) shows that the brand is on the upswing and in demand. That’s great for New Balance overall, even if the current battle to find and shut down counterfeits is a headache for its lawyers and brand safety patrol.

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On the downside of the phenomenon, fake Apple stores are few and far between in China these days, a trend reflected in a recent 14% slide in China earnings for the brand.

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Pledging to brands to fight the rising tide in Chinese fakes, Alibaba announced that it has sped up the process for dealing with reported counterfeit listings on its e-tail platforms. Now, such reports will be dealt with in 24 hours.

This move comes a year after Alibaba founder Jack Ma got himself into hot water when he said to a group that China’s “fake products today are of better quality and better price than the real names.” Global luxury brands continue to identify Alibaba and similar online China retail sources as the biggest threat to their businesses.

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But not all of the counterfeits flowing out of China are coming through online portals, nor are they all wearable. Cambodian authorities recently destroyed 1,000 cases of counterfeit Budweiser and Corona beer that had slipped into the nation from China.

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