Question: Why do the Chinese copy big brands and produce fakes of their own?
Answer: Because they can.
Can in the sense of “are not stopped” – by the authorities, who have obviously not got the situation under control.
Can in the sense of “know how to” – having been trained by western companies.
When planning the P for Place, western companies are quick to jump at opportunities. One is to find a local manufacturer – in keeping with “contract manufacturing” strategies to outsource the second part of the value chain but keep control of marketing and sales yourself.
The problems with this strategy:
1) Quality – Mattel can tell you all about this after recalling more than 9m toys due to Chinese quality problems. The boss of the Chinese company paid off his workers, sent them home, then hanged himself.
2) Goods being sneaked out of the back door and sold on the black market
3) You train people in other countries to become your next competitor – they copy the technology (after you showed them how it works) and before you know it, you have the sorts of products in shops that Bernhard spotted in Lhasa.
Apparently Mattel have stopped producing some of their goods in China, and were even considering returning production to the States. Funny that.