Made In China: Fake Stores-华尔街日报

Welcome to the modern era of copying in China, in which sophisticated proprietors of knockoff stores and chains are targeting increasingly sophisticated Chinese consumers with store experiences and customer service extremely similar to the real thing, down to the helpful store maps, coupons, shopping bags and employee uniforms.

Imitation retailers and restaurants aren’t new in China, but analysts and executives say they have proliferated in recent years. The trend reflects growing awareness of the importance of things like design and customer experience among entrepreneurs in China, where people long ago perfected the art of making imitation goods but where companies have been less successful building their own consumer brands, said Wei Xiaopo, an analyst at CLSA Asia-Pacific Markets.

Retail spending is expected to reach 27.4 trillion yuan ($4.3 trillion) by 2015, up by more than two thirds from the level last year, according to the Chinese Academy of Social Sciences, a government think tank.

Alexander Moody-Stuart, managing director at sandwich chain Subway, said the number of imitators that come to franchising fairs in China increases every year. He said there are Subway copiers that use similar logos, offer sandwiches in six-inch and 12-inch formats as Subway does (China generally uses the metric system), and even accept coupons from Subway when consumers confuse the two stores.

For Subway, which is trying to build awareness to a type of food that isn’t always eaten in China, ‘the mimicking isn’t exactly a bad thing,’ Mr. Moody-Stuart said.

But the imitation stores also limit the companies’ ability to control the experience that consumers have with their brands.

The takeaways: full scale imitation not always bad for the parent brands, but the latter cannot control user experiences at those shanzhai stores. The trend shows higher level of duplication and up to the level of user experiences, above and beyond the fake product level.

via Made In China: Fake Stores-华尔街日报.

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