The current surge in the knock-offs brand market is continuously on the rise in China, accounting for 15% - 20% of products made within the country. Pirated brands of all varieties can be found – apparel, electronics, online websites, and even pharmaceuticals. These items are purposefully created to resemble famous brands, but are only a ‘copycat’ version that is sold at a much cheaper price.

 Copycat products are not the same as counterfeit products, as they only imitate the branding and style of a major brand, and do not try to pass off as the real thing. Even so, this issue has become quite controversial in recent years, as there is still dispute between whether copycat products should be accepted as an advantage or a nuisance. Are copycats taking advantage of consumer recognition of these real brands? Are they taking over the Chinese market – turning into an industry of their own?

Copycat culture in China

This copycat phenomenon has become known as the Shan Zhai 山寨 culture in China. Shan Zhai 山寨, which literally means ‘mountain village’ and refers to a regional area where bandits and outlaws tend to reside, has now become the term for low-cost pirated goods. This term first emerged with pirated electronic goods such as Nokir and Samsung Anycat cell phones. These products resemble the actual brand, but are usually slightly modified so as to be more permissible, such as Punk instead of Puma, KFG instead of KFC, and SQNY instead of SONY. Are Shan Zhai 山寨 products mere frauds? Or do they emanate creativity and innovation? You will find that many people stand on either side of the argument.

The main intentions of copycat products are to appeal to the domestic market, focusing on shorter product life cycles, and targeting local needs at a cheap enough cost. These copycat brands believe that they bring variety to local Chinese consumers at a price that is affordable to the mass market – an important advantage for China’s current economic state.

Free promotion or plain disturbance for real brands?

Consumer research suggests that copycat products can act as ‘gateway products’ or ‘trial versions’ of the real deal. Studies show that “counterfeit brands sometimes verify the desirability of the brand they’re copying”, as consumers who purchase these pirated products usually end up buying the real brand because they like it so much. MIT professor Renee Goslin found that more than half of the women who had bought knock off Louis Vuitton bags eventually “abandoned their counterfeits for authentic items.”  Does this mean that authentic brands are getting free advertising from copycat brands? It seems as though many refuse to accept this view.

In China, copycat goods (Shan Zhai) may be both raising brand awareness, and scrounging off of real brands, which have spent time and resources building their own brand identity. Therefore, brands must take careful actions for counterattacking and do a long-term brand strategy planning that will effectively communicate the message: only the real brands will be able to deliver the aspired brand values to the consumers.