Is The Cat Out Of The Bag?

Alibaba Founder Jack Ma’s recent claim that knock-off luxury goods produced in Chinese factories are “better quality” and have “a better price than the real product” has received much critique from the global luxury industry this week.

“Chinese fakes or knock-offs are better quality than branded originals,” says Jack Ma.

Back to the topic of China’s luxury clientele. And their bags. First off, a little insight into China’s bag-mania through the eyes of Tao Liang (陶亮), aka Mr. Bags (包先生). This 24-year-old Columbia University graduate is one of China’s leading fashion bloggers, enticing the netizen crowds on social media platforms such as WeChat and Sina Weibo with his personal luxury brand handbag showreel. His verbose writings let the shopping-hungry China yuppies in on all that currently fares and flares in high-end handbag land.

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Needless to add, with a following that comprises more than 1.28 million followers on Weibo and WeChat altogether, big global brands and department stores like Stella McCartney and Fendi cannot wait to get their hands, and bags, on the man of the moment.  Nevertheless, there’s something — or rather “someone” — else roaring in China’s luxury consumption at this very moment. A man who goes by the name of Jack Ma (马云). 

Ma is the founder and executive chairman of Alibaba Group (阿里巴巴), an e-commerce group that incorporates several highly successful online businesses. Just to add some numbers to the term “success”: Alibaba’s market value in late December 2015 stood at 212 billion USD. Ma recently found himself causing some controversy among luxury brand lovers and makers, when he on June 14 in a speech at Alibaba’s investors day in the  city of Hangzhou stated that “Chinese fakes or knock-offs are better quality than branded originals” with “a better price than the real product” to boot.

The fact that China’s “fakes” are not using any actual brand names should be especially cause for a few beads of sweat rolling down Fendi foreheads.

After highly publicizing  Alibaba’s efforts to  combat the ramping counterfeiting on its Taobao (淘宝)  and Tmall (‎天猫) platforms, Ma’s comments “run counter to efficient cooperation given that they are misleading, even slanderous,” explained the Unifab association that includes luxury houses LVMH, Kering and Hermes. Yet, Alibaba’s newly-installed policies apply mostly to those items carrying the actual logos of brands like Fendi or Louis Vuitton. Whilst Ma specifically used the word “fake”, his definition thereof seems to refer to any off-brand item that almost looks identical to the branded luxury product, but goes by another name.

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The final nail in the coffin of the global high-end retail realm was Ma’s insistence that the infamous Chinese fake is manufactured in the same factories as the real label deal. “They’re the same exact factories, the same exact raw materials, but they do not use that (brand) name,” he stated. I suppose Ma kind of let the Aristocat out of the bag right there… How very upsetting to [enter luxury house name] this must have been.

All things considered, the counterfeit fields of combat in China remain concerning to brands. The fact that the “fakes” are not using any actual brand names should be especially cause for a few beads of sweat, as the term refers to China’s off-brand yet legal knock-offs. Additionally, China’s daigou (代购, buying brands on someone else’s behalf) culture doesn’t help matters either. Many such “agents” who claim to offer up the real brands, are caught selling knock-offs on Taobao, et al.

In the end, it’s all about revenue. And as they say: One bag of money is stronger than two bags of truth.


Photos: Mr. Bags — Sina Weibo.