Riding on the tide of brand and knockoffs

If you want to understand China's outdoor outfits market, a survey by Universal Consultancy might well be the place to start.

The survey of 630 people aged between 18 and 35 in Beijing, Shanghai and Guangzhou from August to October last year suggested that when Chinese consumers buy outdoor gear such as tents, sportswear and mountain bags they have at least two predominant habits.

The first of these is chasing brands.

Ninety-three percent of the respondents say brand is one of the top three things they look for in choosing a product. The other two things are quality and price.

Many respondents can cite at least three brand names, some of which have not even set up shop in China. Many respondents say they have some branded outdoor products such as The North Face jackets, Mountain Wolf bags and New Balance shoes.

But only 46 percent say they have engaged in any outdoor activity such as trekking, camping, mountaineering or even a picnic at least once in the previous six months.

This means that while most Chinese consumers are not outdoor sports fanatics, they still buy outdoor gear, especially sportswear, and use it in their daily life.

Reasons for doing so include "All my friends have them, so I should too", and "It looks cool to wear outdoor sports shoes in the office".

The second predominant habit of Chinese consumers is that they often buy knockoffs.

Fifty-two percent of survey respondents admit that they have bought at least one knockoff of a branded outdoor product. Given that respondents were asked to identify themselves, it can be assumed that the percentage of those who buy knockoffs is higher.

The reason they do so is simple: knockoffs are so much cheaper than the real thing.

Knockoffs are obviously bad news for outdoor outfit makers who want to cash in on China's burgeoning market, but there is also some good news.

It seems that the older consumers are the ones who are less likely to buy knockoffs. In the age group 30-35, about 20 percent say they will buy knockoffs. This, presumably, is mainly because those in this group can afford to pay more. And, according to the survey, they buy outdoor products mostly at licensed shops, big shopping malls and from overseas.

Even in the 18-30 age group, most respondents say they tend to buy at least one branded outdoor product to go with knockoffs, and they say that if they can afford the prices in the future they would stop buying knockoffs.

Based on these findings, here is some advice for outdoor goods producers and sellers.

First, a lot should be invested in marketing and advertising products as luxury and high-end, rather than as safe and multi-functional. This is because at this stage Chinese consumers who buy outdoor goods do not necessarily take part in the corresponding activities and pay relatively little attention to the practicability of the goods. But, of course, the quality of the goods should not be compromised.

Second, if you find knockoffs of your products being sold at places such as big shopping malls and decent supermarkets you should report that to the authorities. After all, this is where your target buyers often go.

As for the sale of knockoffs at street-side stalls and online, this is unlikely to stop any time soon, so there is very little you can do. Those who buy such knockoffs simply cannot afford the prices of the real thing. They won't buy branded products even if they are stopped from buying fakes.

Louis Vuitton is among the foreign brands most faked in China, but that does not deter Chinese people from flocking to Louis Vuitton shops worldwide to buy its goods.

Third, do more promotions on university campuses. Students there will be your clients over the next decade. Such promotions could include handing out discount coupons, selling out-of-season products and sponsoring school activities. The small outlay will eventually reap big dividends.

The author is an analyst specializing in the retail sector at Universal Consultancy in Shanghai.