As Chinese businesses begin to lead the world in research and tech, anti-counterfeit efforts are finally bearing fruit – but marketers are having a hard time convincing clients of the need for original creative.
A decade ago, counterfeiting and piracy were issues discussed only in hushed tones in China. Any public acknowledgment of the subject was seen as bringing shame upon local governments and central authorities in Beijing. However, in recent years the taboo has been lifted. The government now considers intellectual property protection key to the success of the country’s homegrown global brands.
That acknowledgment has also trickled down to courtrooms, where Chinese judges have earned a reputation for being pro-patent. This is music to the ears of both foreign and local brands. Between 1996 and 2016, judges heard more than 87,000 copyright-related cases. 3,908 websites have been shut down because of copyright infringement in the past five years.
According to Anthony Tham, the executive creative director at Publicis Worldwide China, in recent years Chinese giants such as Alibaba have filed more than 10% of the world’s patents in blockchain technology. The e-commerce firm currently holds the most patents in the world. For cloud and AI patents in 2016, China outnumbered the United States by 8:1.
Danish toymaker Lego succeeded in its first copyright competition case in China in 2017 when the Shantou Intermediate People’s Court ruled in its favor, after it found two Chinese companies copying the packaging and logos of Lego products. The next year, the brand won another case when a court ruled that four companies had “infringed multiple copyrights of the Lego Group and conducted acts of unfair competition by producing and distributing Lepin building sets”.
While IP laws may have changed, the culture of copying has not disappeared overnight, especially in the advertising industry. According to an industry source who works in a production house in China and did not wish to be named, there is a culture of finding loopholes and tricks to legally own or control an IP. For example, ‘cybersquatting’ – the practice of registering corporate names and copyrighting the visual identities of any foreign brands rumored to be coming to the country – is popular in China.
The holders then demand high fees from incoming foreign brands to return their IP. If the brand is unwilling to pay, they will face difficulty doing business in China – or even get sued themselves.
It seems foreign brands are quickly catching on to this and countering the practice using the same method. Counterfeit operation Supreme Italia used a loophole in Italian law to successfully sell fake Supreme goods in China. The American skateboarding shop and clothing brand does not have any stores in China, and so the counterfeit group managed to gain ownership of the sales and distribution rights for the Supreme brand in China. Since then, it has managed to convince Samsung to form a partnership in China, open a flagship store in Beijing’s Sanlitun district and host a runway show at Shanghai’s Mercedes-Benz Arena Cultural Center.
The source also shares the example of a creative director based in Shanghai who, when interviewing artists to join his team on four separate occasions, was shown his own work by candidates claiming it as their own. Although these artists were not hired, they eventually found work elsewhere despite not being able to deliver upon the quality they claimed they were capable of.
“I have heard this kind of story elsewhere too, and it seems to pervade the industry. I think it is often a question of lack of consequences,” the source tells The Drum. “The industry is short of good artists, and with such a massive, sprawling industry communication between companies is stunted to say the least. It allows artists and studios to continue counterfeiting with impunity.”
These practices abound due to China’s past status as a closed ecosystem. Replicating an IP is much easier than building a new brand from the ground up, Ramzi Chaabane, the head of business and strategy at MediaMonks China, tells The Drum.
However, the Frenchman, who has spent more than a decade working in China, also notes that IP practices in China have improved dramatically overall in the past decade. Although the west had a head start in technological innovation, the situation has changed – now western companies want to copy China instead.
The changes have been more significant since 2008, when the generation born in the 1990s first went out to work, bringing a very different mindset to the workplace, observes Chaabane. He cites the example of WeChat, which went from being a simple messaging application to a powerful superapp with multiple uses.
“They are entrepreneurial and ideologically creative. For them it was like, ‘Let’s try to do things our own way and do it very fast,’” explains Chaabane. “One of the reinventions in that early stage was the use of QR code, which the rest of the world had abandoned. China kept it and, seven years later, I can get your contact details with just a QR code.
“This has led to more innovation in terms of social payment around the world. Apple recently announced that users can pay with iMessage, something WeChat had done a long time ago. This is a China-owned invention, which the likes of Spotify and Snapchat have now also copied.”
The culture of copying in China can also be traced to ‘China speed’, a term the country’s ad industry coined, in a nod to how clients there demand both speed and scale. It is common to see campaigns go from briefs to execution in less than six weeks, because being the first to create innovative projects is key for brands.
Creative director René Chen admits that operating on China speed is hindering creativity, for both people and brands. Time pressures further incentivize the culture of copying, says Chen. The partner at Jones Knowles Ritchie’s Shanghai office points out that producing original creative work takes time, while ensuring that a client is first to an innovative product or with a new campaign is valued more highly.
Chen notes that this applies to local clients rather than multinational ones, who are more time-affluent and follow established working roadmaps. Local clients, on the other hand, typically do not approach briefs with set expectations.
“The problem of copying starts to occur because of that. Of course, the task itself might be, I won’t say simpler, but maybe it’s chasing after trends versus going after something related to their brands,” she says. “With less time, it means we create things for local clients that are trendy and of little relevance to the brands. In contrast, multinational clients will be very much focused on their brand, a little bit on trend, and have more time. So, I do see there’s this kind of a different momentum, and a very different mindset toward creativity.”
Arthur Tsang, the chief creative officer at BBH China, agrees with Chen. He recalls an incident when, despite conducting exhaustive checks on a campaign script using China’s and global search engines before it was shown to a client, the agency still unknowingly went to that client with a campaign that had been produced before, because of the lack of time.
“The client saw the first round of it and approved it, and it was only then that we discovered there had been a commercial 10 years previously in the US that was very, very, very similar and we all freaked out,” explains Tsang.
“But this is also the agency’s integrity. Although the client loved the idea, I had to go to them personally and say, ‘Look, we know you love the script, but we are going to have to pull it. We promise we will come back to you with something better, but we cannot use this.’”
The client appreciated BBH’s integrity because Tsang says taking the risk of being called out as a copycat is one that’s not worth taking. With the world becoming more globalized, social media outrage can reach even small agencies operating in China.
As China goes out if its way to change its copycat culture, Chaabane predicts that the country will soon lead IP innovations on modern technology such as voice assistants as marketers try to figure out how to integrate a brand into a product. The country has the necessary corporate ecosystem and a population to sell to, both of which will draw imitators from other parts of the world.
“The flexibility in terms of innovation and IP, the fact that things happen faster here because of less legislation, and closer direct links between the product and the factory, are all reasons why other countries will now copy China.”
This feature first appeared in the February issue of The Drum which focuses on the opportunities and challenges to be found in China. From its increasingly sophisticated ad environment to its highly developed e-commerce scene and fast-paced tech sector, the world's most populous country holds temptations and obstacles for the marketing industry.