I see people crying about high quality fakes, and I interpret it as the initial problem with the luxury goods market: they’re bullshit and overvalued. If your product can easily be replaced by a much lower price knock off, what you’ve made is something of no actual value, and you get what you deserve.
There are people who would slap you in the face for talking about their work like that. You're completely ignoring the immense R&D costs that go into creating innovative, original products.
We all knowingly support software patents with the businesses we work with.
This is no different.
These brands were there first and did the research and development pursuant to establishing what is a good user experience and most-desirable in a handbag, watch, et cetera.
Sunk costs are sunk. A truly competitive market wants you to operate at the marginal cost of production.
The only way to recover R&D costs is through protected IP, with my personal preference being brands and trademarks.
Fashion is not protected. That's why it changes so quickly. If you can't come up with new and appealing designs every day, you will die in that industry, because the knock-off copies are being made the day after they ship, at the latest. If you have a valuable brand and poor security practices, there might be copies on the market from the day after your design reaches the factory. But the legal knock-offs will not have your brand labels in them.
The problem is trademark infringement. It isn't copies, but counterfeits. Here's the money quote from the article:
"Detecting and combating counterfeiters is not easy," said Monks. "Many are operating out of countries where prosecution may be impossible, and that gives them the confidence to flaunt their products on image-driven social platforms such as Instagram. Taking action against their accounts is digital whack-a-mole; the counterfeiter generally has dozens more accounts already created and ready to activate in order to avoid disruption to their trade."
So... caveat emptor. Without a global convention on trademark protection that heavily punishes incoming trade from non-member nations, the burden is on suppliers to devise anti-counterfeiting measures that allow consumers to determine at the point of sale whether a product is genuine or not.
No, those handbags and watches are bought simply because they allow the buyer to signal 'status'. If people with less money also get to signal that same status then the original loses its value. That's really all there is to it, a good user experience doesn't come in to play at all (most of that stuff is unusable anyway) and the 'most desirable' bit is exactly that: status.
It's about design, and design is inherently about quality and value. It's the reason you might choose to pay more for a handmade Italian shirt made in a small workshop that has been running forever compared to a mass-produced one made with the cheapest labour in Myanmar (though functionally equivalent at a basic level). The Italian shirt will have better fabric, stitching, a more expensive split-yoke that hangs better on your body - real tangible things. Design only denotes status via knowledge of this value, not by having the money to afford it per se. So it's more a marker of education and sophistication. That does mean moving up Maslow's hierarchy so there is an economic element but that's not the essence of it. Sure I would need more money to buy the handmade shirt from the Tuscan workshop, but I would also need to know about it in the first place and why it might be worth paying more - it's really more about knowledge than money. So are Adidas any better than low cost no-name trainers or knockoffs? For a kid the answer is unequivocal and you are socially dead without the original; I hover between the two personally.
Design is not about 1%er luxury or fashion fads - it's really important at a national level. Obviously there is soft power with its indirect effects, but there is also the direct economy. Good design eventually tends to become commoditised and so there is economic value in being able to create new design - this is actually a vital process for every developed economy not to be crushed by whichever country is offering the cheapest labour.
An example is suitcase manufacturer Rimowa. If you look at their website it's a history of innovation in their field for the last 100 years, from aluminium trunks in the 1930s, to watertight luggage in the 70s. Still if you want a super expensive very high quality aluminium suitcase, they don't have competition, I guess due to that requiring pretty specialised production and expensive raw materials. If you buy one from them, they will repair it and knock dents out for free for lifetime (likewise Hermes will clean and press their ties for free, a difficult job which can easily ruin a silk tie) - so very high quality and standards. Maybe one day you will be able to buy a near-enough Asian copy for very cheap, but until then, this German company has the whole world's business for really nice aluminium cases. Rimowa also made a materials innovation in 2000 with polycarbonate suitcases - extremely lightweight, flexible, and near unbreakable from impact. For quite a while they were the only ones to make them. Recently however, that's been commoditised and you can buy cheap knockoffs which are fairly close to the original at a functional level. So now Rimowa have to find the next innovation as the cycle repeats to find a new USP for their products (e.g. now they are starting to get into trackable luggage with electronic airline tags).
That's Rimowa, but each company in a developed country within a global economy cannot compete on being cheapest, and instead needs to follow this process of competing on intellectual capital to stay in business. It requires at least a society with high levels of education in design, and a functioning legal system covering IP. China are now also starting to face this reality as they cease to provide the cheapest labour globally and have a growing middle class to support - and you'll therefore see increasing focus on design, innovation, quality, and finally IP even.
To your original complaint, you do sometimes hear of flashy gaudy things which are supposed to signal status via cost (tacos made with gold leaf and caviar, diamond-encrusted phones, gold-plated ferraris etc) - but you'll notice that those are considered poor design, never get taken up and commoditised, and only have economic value as marketing tools to get gawpers in for lower price items. They don't ever represent real IP in the way that the ipad, or high quality luxury goods do, but are instead held up as anti-patterns (which is why we hear about them).
> It's the reason you might choose to pay more for a handmade Italian shirt made in a small workshop that has been running forever compared to a mass-produced one made with the cheapest labour in Myanmar (though functionally equivalent at a basic level). The Italian shirt will have better fabric, stitching, a more expensive split-yoke that hangs better on your body - real tangible things.
I'd be curious to see if you could tell the difference under blind testing. In just about every other area it turns out that most people can't tell the difference.
I have expensive shirts and cheap ones. Definitely a tangible difference in look and feel, but some of my most functional are a cheap range from uniqlo which don't need any ironing and use good cotton. Unfortunately you are usually paying for a double yoke. It's true that what we think of as designer brands in clothing tend to rebadge and sometimes the only value they add is some visual design element. It's a part of why we see a focus on 'the artisanal economy' - a logo can be reproduced easily but somebody who has had decades of sewing shirt collars or handmaking shoes can't and has scarcity as well as quality. Not scalable individually but collectively very high value in much the same way.
When something is actually made well, you can tell and it is worth it. But a Coach bag is made in Myanmar just like everything else. If you get a knockoff Coach bag, it’s impossible to tell, probably because it was made in the same damn place by the same damn people.
That’s what I’m talking about. Not old world craftspeople making one-offs.
Yes. Until wages are globally normalised that's good news for Myanmar, bad news for Italy. Italy better make something that is more than a product of sheer labour and raw materials - and that's the definition of design.
I think perhaps what you're getting at is that it requires education and buy-in from the consumer and perhaps that we don't live in a world of urban sophisticates who care that much about the stitching of their trousers. I'd offer some counterexamples there - 1. iPhone. Not the cheapest smartphone by any means but has design writ large and running through the user experience - and hugely popular in emerging economies where you may expect everybody to be on cheaper android phones. 2. Adidas, Nike - kids will pay premium all over the world and don't want fakes. 3. Japanese denim enthusiasts. Got to have the old looms for making high quality denim and people are ready to pay huge amounts for that. That has even extended to reviving old ring spun looms to make sweatshirts so they have the right weight and feel. 4. Coca-Cola, Red Bull. 5. Premium alcohol brands. 6. Super expensive premium Spanish ham - huge in Asia now.
This is really closer to a trademark issue than patent, no? Few people are buying a watch for the process by which the watch works, but rather for the quality and status (and price) that the brand represents. To check this hypothesis, think about how mad anybody would be if the internals of a watch were copied exactly on a fake, but the branding, name, logo were totally unique.
No, that is wrong. Fakes are cheaper for two reasons: they are less well made - which may not show on the new item without a lab. Like how do you check the quality of the metal compounds used? And of course it infringes on all the IP of the creator. The fakers don't have to spend any R&D expense, they carbon copy.
Yes, there is a large markup on luxury items, but in most cases when you buy fakes, you don't get the same quality and of course, you are just pirating the original design. This is as legit as "buying" software for $1 a piece.
We don't "know" it, but that is the usual experience. Why should someone put more effort and cost in making a fake? Typical fakes - and lets not even get started on replacement parts for cars or even airplanes - are not only carbon copies to save the design effort, they are not using the same production processes. And these are very important insuring the quality of the product. Fakes might use cheaper alloys, the production process itself might not be as required and quality control missing. And so a fake bolt can have only the fraction of the load capacity of the original one.
Edit:
And of course, the beauty with a fake is, that if it fails, the blame does not fall onto the producer of the fake, but even possibly of the original brand ribbed of... another incentive not to make overly well built fakes.
it really depends on what you value. I get proportionally more value from a $50 Rolex knockoff than the genuine 10k one, even if the knockoff is pretty shitty. I am sure to some people it is different, but to me it isnt
