China Investigates Fake Apple Stores

Chinese industrial and commercial authorities in Kunming, Yunnan Province, have started to inspect all of the southwestern city’s electronics shops after an American blogger wrote about a fake Apple store, Xinhua news agency said on Saturday. 

The inspections were carried out after three self-named “Apple Stores” were exposed via the Internet, but were not authorized by Apple Inc, it said.The inspections will look into authorized -permits on brand use, business licenses and the purchase channel of each store, said a worker with the city’s industrial and commercial department.

The result of the inspections would be announced to the public soon, the worker said.The three alleged fake Apple Stores were discovered by a traveling blogger named BirdAbroad, who posted photographs and challenged the stores’ legitimate status and rights to use Apple’s logo, which sparked a media and online frenzy.

Complete with the white Apple logo, wooden tables and cheery staff characteristic of real Apple stores worldwide, the Kunming copies left even regular industry watchers startled at the elaborate fakes.The blogger who made the store an overnight online sensation said the first Kunming store she discovered was a “beautiful rip-off” and the salespeople “all genuinely think they work for Apple.”

Apple has declined to comment on the fake store or others like it dotted around China.The Cupertino, California-based firm has just four genuine Apple Stores in Beijing and Shanghai and none in Kunming. The company has 13 authorized resellers in Kunming.

The fake Apple store is probably the most audacious example to date of the risks Western companies face in the booming Chinese market.“I’m not aware that there have been actual fake stores like that before,” said Bob Poole, vice president of the China operations of the US-China Business Council in Beijing.“If your products are being sold as fakes, then your reputation goes down and people are going to be less willing to buy. We have to maintain active vigilance,” Poole said.

The bogus store, which staff admitted on Friday was not an authorized reseller, cuts to the core of the risk big brands take in China.The widespread unauthorized reselling even of real consumer goods means it is more difficult for companies like Apple to manage their brands and risks undermining their longer-term plans to make inroads into the country.

“It’s becoming more of a problem I think,” said James Roy, a senior analyst with retail consultancy China Market Research in Shanghai.“A lot of foreign brands are increasingly really seeking to set up a real retail presence in China, not just selling to resellers or through franchisees,” he said.

via Taipei Times and Birdaboard