I had an interesting discussion a few days ago with the manager of a factory in China. He has big plans for selling on Taobao.com. Selling what? The same products he manufactures for one of his American customers…
His customer orders large quantities of garments, mostly in small size. This was already intriguing to the factory. The products have to be delivered to a warehouse in China. An employee from the warehouse told the factory’s truck driver that 90% of the products would be sold on the Chinese market.
The factory manager connected the dots. Of course it can be sold in China. He even found where it was sold, and for how much. His next step? Using some slightly different fabrics (to cover his a** in case the buyer finds out and investigates this situation), designing a logo that are relatively close to the buyer’s brand identity, and pushing it on Taobao.
A few notes about Taobao: it is the sister company of Alibaba (the famous B2B directory), and it was launched as a response to eBay’s entry on the Chinese market. It takes no fees on transactions–only on advertisement. It has grown considerably, and most urban and connected Chinese have already purchased something on Taobao (even I did it…).Could this happen with consumer goods sold in Europe or in the US? With many of them, yes. Sometimes they will use your brandname. It is actually very easy to figure out whether it is already the case… Go to Taobao.com, type your brand and search. You might be surprised.
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Related articles, about what I call “parallel supply chains”:
Yes, it happens all the time, and no you cannot do anything about it in China. However, as soon as the Chinese factory owner sends his wife, kids to the USA / Canada / Australia, that’s a great time to start telling your government about all the money they’ve got stashed offshore and are not paying tax on in their new country.
Just checked Taobao for our brands. Thankfully none listed.
This is one of those things that is really important to check up on regularly, but doesn’t really cross my mind until I read something like this.
Thanks for the heads up!
well, this is already hurting some brand entering China. counterfiet products are huge problems. just like on eBAY, you could find e.g.Monster’s headphone for 1/10 of the original price. That means the headphone is from China. For Chinese sellers selling to US, this is an issue.
I want to export our products to other countries, and i found this is not a easy thing. and in China lots of young people would like to buys things from totao, totao is a big market for some people. view my site oceramic.com