Tuesday, August 2, 2011

Chinese retailers hijack the Ikea experience: They're not content with only stealing the products themselves

Nestled in a sleepy southern district of Kunming city in southwest China, is a 10,000 square meter, four-story building that could make Swedish furniture giant Ikea uneasy.

11 Furniture, as the store is known, copies Ikea's blue and yellow color scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea's Swedish meatballs and salmon.

This knock-off Ikea store is emblematic of a new wave of piracy sweeping through China. Increasingly sophisticated counterfeiters no longer just pump out fake luxury handbags, DVDs and sports shoes but replicate the look, feel and service of successful Western retail concepts -- in essence, pirating the entire brand experience.

"This is a new phenomenon," said Adam Xu, retail analyst with Booz&Co. "Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats."

Brands are much more than a logo on a handbag or some half-eaten pipfruit on a computer.

Many of the most successful consumer companies have invested millions in promoting and building brands which encapsulate ideals, values and aspirations, creating valuable and loyal customer bases that sometimes border on cults.

Last month, an American blogger set off a media storm after she posted pictures of an elaborate fake Apple Store in Kunming, selling genuine if unauthorized iPhones, Macbooks and other widely popular Apple products. (more)