Nowadays, bags have been a fatal attraction for every girl. No girl can escape from the charm of a good-looking bag. In the past, bags were just a tool to put more things. Well, the current bags are not only as simple as putting things but also represents girls’ sensitivity to fashion and aesthetic level. Having a bag of big brands is a dream for girls. Big brands and unique bags do influence girls’ purchasing of bags. However, many girls only know one big brand — LV.
And we usually have two channels to buy LV bags: one is to buy in domestic specialty stores, the other is overseas purchasing.
LV bags are well known for their high price. Since the price is transparent, some buyers begin to look for overseas Chinese, immigrant Chinese, and some flight attendants to help purchase expensive LV bags. However, are the bags they brought home 100% genuine?
Purchase agents
Perhaps most buyers are still kept in the dark about the so-called “purchase agents”. An item worth hundreds of thousands of dollars like LV is enough for a person to take the risk. And news about such scammers is endless. Just two days ago, a woman in Chongqing spent more than 300,000 yuan and asked a purchaser to help her buy LV handbags in the UK, which turned out to be two fake bags.
These days, on your WeChat moments, what you see is not only the recent status of your friends, but the most timely updated information of luxury brand bags, including LV, GUCCI, PRADA, and Chanel. A bag worth hundreds, thousands, or even tens of thousands of dollars. The question is: Are these bags 100% genuine? Where did all these fake and high imitation bags come from?
Hiding in Sanyuanli, Guangzhou—-A Large High Imitation Luxury Market
One day in May, Ningning came to Sanyuanli which is in the north of Guangzhou City. This is one of the busiest arteries in the north-south traffic of Guangzhou, where nearly 30 large leather products professional markets gather. A large number of leather products are sent from here to the whole country and even all corners of the world. The trade volume of leather products reached 40 billion yuan a year. Amid the busy traffic, there is also a huge trading market for high imitation luxury goods.
A few years ago, as the movie “Mission Impossible” was released, Prada’s “killer bag” became popular. With no way to buy this bag, Bingqi decided to try the high imitation luxury market. So she asked a friend in Guangzhou to help her get this high imitation leather bag in Sanyuanli. In the end, she bought a high imitation bag at a price that is one-tenth less than the original bag, which was not significantly different from the original product.
One day of Xiao ma
Xiao Ma is one of the salesmen in Sanyuanli High Imitation Leather Market. His daily routine is to walk around the subway entrances or flyovers in Sanyuanli, distribute promotional cards and leads customers to various high-imitation leather sales shop. Following his pace, Ningning came to a row of old residential buildings about one kilometre from Sanyuanli Metro Station. Various stores gathered downstairs, with people sitting in groups at the door. When you pass through the crowd, you will unconsciously feel all kinds of scan-like eyes “brushing” at you, as if you are on the scene of a cop film in the 1990s.
After 5 pm, the whole wholesale market entered the most buzzing time of the day. Jargon such as the original leather, replica, 1:1, etc. accurately express the needs. After the price is negotiated, the only thing to do is to pick up what you have ordered in the square outside the market before they get off work. The express company that had not been seen during the day quickly occupied the front door, and the cargo boxes piled up like a hill only stayed here for an hour.
Two days later, these products will be sent to Ladies Street in Beijing, Changle Road in Shanghai, Taobao stores in Wuhan, and even boutique houses in Karamay, Xinjiang. Within a month, “luxury products” of different brands, styles, and workmanship levels will appear in buses, high-end office buildings, and other places, showing the identity and taste of their owners.
The bag they hold in hand is not only a good or bad treated leather bags, but also people’s yearning for a better life and their judgment on their self-value, as well as the huge vanity economy that accompanied the entry of luxury brands into China.
Interest chain—-Seamless connection from the cooperative factory to sales
Where there comes the demand, there comes with the supply. Behind such a huge market of high imitation luxury products, first of all, there are a large number of customers. Learned from various interviews, there are generally several types of buyers: one is purchasing agents; the other is people who want to buy a genuine one but actually get a high imitated one; another is who clearly wants to buy high imitation ones.
Over the years, Xiao Ma has accumulated a large list of customers. Among these customers, there are purchasing agents and physical shop owners from all over the world. “Some purchasing agents do purchase luxury goods overseas, but the ones they send to customers are not all genuine products. I have seen many agents like this.” Xiao Ma said.
As demand increases, there are naturally manufacturers producing high imitation products. The bags displayed in the room in Sanyuan seem to be no different from the original ones, no matter the materials, workmanship, or accessories. Here, as long as you spend one-tenth of the price of a genuine product, you can buy a product that looks exactly the same as the genuine product.
Moving fast
“Some of our customers sell these high imitation luxury products, and no one can tell the difference from the genuine ones. The products we made are exactly copied from the original one at a ratio of 1:1 after our boss bought from overseas and disassembled.” A businessman in Sanyuanli said, “Once a new product comes out, they can make the copy within a few days. Products purchased here can be repaired if quality problems occur. We provide after-sales service.”
Yu Qi, a shopkeeper selling foreign trade luggage and bags, told Ningning. A genuine bag priced at 20,000 yuan. High imitation bags are generally divided into three levels: original, high original, and top original. The original bag uses materials and accessories that are close to the original product, and the price of each bag is about 500 yuan. The high original bag uses the remaining materials and accessories purchased from the original factory, which are exactly the same as the original bag. The price is around 900 yuan. And the top-level original bag is made of better materials and accessories and better workmanship. The price is between 1,500 yuan and 2,000 yuan. If people are not in this industry, they can barely tell the difference. In other words, you can buy a bag of the same model, same quality, or even better quality as the genuine product, but at a price which is one-tenth of the original ones. Speaking of economics, this seems to be a perfect choice.
Take a look at the stock in the office building
During Ningning’s interviews, young men and women kept asking if she needs to look at the stock. “The products here have no logo on it. We can take you to see the products.” Then Ningning was led by a woman to see on spot.
Not far, Ningning was led to an office building. They went to the 10th floor. After the woman rang the doorbell several times, the security door was opened a crack. A man glanced through the crack. After they talked in the local dialect for a while. As soon as Ningning entered, the door was closed, and the man stayed behind the door and never left. (Quite like a cop movie, isn’t it?)
Ningning was shocked by the scene before her. This was actually a three-bedroom and one-living house. The shelves around the room were filled with various bags, and dozens of people were crowded in a space of less than 100 square meters. Unlike the bags in shopping malls, these bags are marked with the logo of luxury brands.
The room was so bustling. The woman motioned to Ningning to choose the bag she liked first, and settle the bill together. Ningning saw that someone had picked up four or five bags. After some selection, Ningning chose two bags, spending a total of 3,000 yuan. Estimated according to the store price, these two packages are worth nearly 60,000 yuan.
Insiders of the industry broke the news
The top-original orders are sold at three times the price they buy from Sanyuanli. It is said that these high-imitation bags are not only aimed at ordinary consumers. There are constant media reports that high-imitation bags sneak into luxury stores and sell them as genuine products.
An insider broke the news, “For example, a big brand OEM factory received 10,000 processing orders. But 2,000 of them have minor defects. The brand shop will naturally not accept them, and the OEM does not want to lose money. Eventually, these products will flow into the market, which is the top quality high imitation products. At the same time, with some best-selling bags, the factory will also accept orders, but the processed fabrics and workmanship are lower than the genuine ones. The bags made are similar in shape but not in spirit. Only people who know a lot about bags can tell the difference.”
To produce a bag that is almost the same as the original product, processing companies will spend a high price to buy the authentic bag, and disassemble it as a reference template. In terms of material, they will try their best to find suppliers of genuine materials. If they cannot find them, they will choose very similar ones instead.
Speaking of profit, the woman said to Ningning that the profit would be doubled, and even higher if she sells top-quality and refined imitation products.
The boundaries of the vanity economy
This kind of economy dues to the immaturity of consumers. Today, more and more young people are willing to buy light luxury brands.
Luxury brands spend a lot of money to bring consumers an experience that they are above the product.
The Prada Group’s total revenue in 2012 was 329.7 million Euros, with a gross profit margin of 72%. However, the final pre-tax profit margin was only 26.8%. In other words, 150 million Euros of it were spent on building stores that dizzy consumers like a maze, publishing beautiful advertisements, and getting bags on the wrists of celebrities.
This happiness is not only conveyed to people who are willing to spend more than 10,000 yuan to buy a bag, but also to consumers who do not have the financial strength or are unwilling to spend a high price to buy handbags but want to own them. As a result, the demand emerged, cheated goods prevailed, and the high imitation industry began to flourish.
Even for cheated goods, manufacturers with more than ten years of experience in China are beginning to be willing to provide a better experience for their customers. In addition to the bag itself, a full set of matching dust bags, ID cards, and Hong Kong invoices will be available. “The real all-genuine goods are only naked bags. The reason is very simple. After the packaging is complete, they are all finished products. The factory inventory is very strict. How can they be taken out?” Xiao Ma believes, “It is meaningless for people who buy cheated goods to get this warranty. But these full sets of props will still give buyers some psychological comfort.
However, how long can this vanity economic boom last?
First of all, companies of the high imitation industry need to hide in dark and the business will never get bigger. Nowadays, supervision is becoming stricter and stricter. Xiaofan, an operator in the market, has to accept inspections from the market every Monday. Although it is a routine matter, he must also take down products with obvious trademarks. In the wholesale market where Xiaofan is located, all the trademarks on displayed bags have been downplayed. For example, the hardware on it will be cut off. Besides, Taobao, one of the main channels for such goods, has also begun to monitor. Sellers who do well will dilute a certain letter of the brand name. For example, Prada will be labeled Pr*dad.
Secondly, this kind of business actually depends on the immaturity of the consumer market. In the past, consumers only got two choices: domestic brands under 1,000 yuan or luxury brands above 10,000 yuan. Today, there are more and more light luxury brands and designer brands pricing in between, including Coach, Tory Burch, and Michael Kors. More young people are willing to buy them.
Furthermore, this market itself can drive out bad from the good. On the one hand, consumers want better quality bags. While on the other hand, the profitability of sellers who can provide high-quality bags is not ideal. As consumers have no idea about distinguish. A bag of 600 yuan and 800 yuan can be sold at the same price, which makes the business of original products hard to sell.
At night, the leather wholesale market in Sanyuanli has entered a busy period. The solicitor only wants to transport the goods from the warehouse to the stall in the shortest time. When will this prosperous and chaotic industry have its turning point?
