China really is picking up on this whole consumer culture thing.
A scandal came to a head late last week as the head of Shanghai-based luxury furniture brand DaVinci melted down at a press conference in which she said allegations that it deals in counterfeit furniture — sold as "made in Italy" but in fact made in China — were false.
As the New York Times explains, "DaVinci furniture stores have been places where wealthy Chinese in (Shanghai) and five other big cities can indulge their appetite for imported luxury. Promoting itself as 'a haven for premium products,' DaVinci is the place to go for Versace sofas, sumptuous Fendi Casa calf-skin couches or stylish chaise lounges stamped Made in Italy. A DaVinci bedroom set can sell for $100,000."
The scandal exemplifies how fragile the brand relationship is in China and how Chinese consumers are increasingly upset about counterfeiting.
Shanghai Daily explains the background: "Officials with the Shanghai Entry-Exit Inspection and Quarantine Bureau said they had found that some of the furniture DaVinci stocked was made in China and transported to the Waigaoqiao Bonded Zone before being stored in its Shanghai warehouse."
The bureau found that the company had gone through customs procedures for 15 cattlehide sofas produced by a Haining company in Zhejiang Province on June 23 at Waigaoqiao, and "imported" the sofas on the same day. "Staying at the bonded zone for a day, the products changed from domestically produced ones to imported ones,' said Zhou Guoliang, a bureau official."
The scandal exploded, according to China Daily, when a whistleblower at DiVinci reported that furniture labeled and sold as "Made in Italy" was really made in China, at the Changfeng Furniture Company in Dongguan, Guangdong in southern China.
DaVinci also distributes top brands such as Versace Home, Diesel, Armani Casa, and Fendi Casa, and saw revenues over $64 million last year. Shanghai's consumer agency has ordered DiVinci to, temporarily anyway, stop selling its Cappelletti brand.
Denying all charges, DaVinci's general manager, Panzhuang "Doris" Xiuhua, broke down on national TV, making counteraccusations about DaVinci's competitors copying its designs, as you can see below:
To make matters even more bizarre, the press conference featured a self-proclaimed customer who, while wearing dark sunglasses the whole time, railed against consumer confidence in the brand. Stating that he had spent millions of yuan on DaVinci product, he said he was concerned for the well-being of his wife and child using such furniture. He then declared the whole event "fake" and stormed out with reporters in tow.
On its website, DiVinci says it was founded in 1978 as an agent for German dinnerware brand Fissler. It states that DaVinci "placed a lot of importance on gaining, earning and retaining clients' confidence and trust." Its "Press Released" section is dead.
The DaVinci scandal is not all unlike the recent Heitiki" milk fake-out, when a brand importing milk substitute to China attempted to give the brand a little foreign gravitas by claiming the product was popular in its home nation of New Zealand, even though the product was not sold there.
Both scandals demonstrate both how the market deeply desires the attributes of a premium, high quality brand, yet at the same time how China cannot seem to shake its reputation for taking the easy route to creating (or recreating) those brands.
As the Chinese consumer becomes increasingly savvy, the berth for such counterfeiting will shrink and stories like DaVinci's will likely become more common.
Indeed, the New York Times notes that as a result of the DaVinci uproar, "Now, angry people are using China’s popular QQ Web site to post information about other brands that claim to be from Europe, including clothing and a James Bond condom."