Wed, Aug 03, 2011 - Page 14 News List

Chinese retailers hijack the Ikea experience

Pirating in China just got more sophisticated, with the Scandinavian furniture seller’s retail format being copied and hawked to the public

By Melanie Lee  /  Reuters, KUNMING, China

A welcome poster is displayed next to a dining room design idea at the 11 Furniture Store in Kunming, Yunnan Province, China.

Photo: Reuters

Nestled in a sleepy southern district of Kunming, China, is a 10,000m2, 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 fruit on a computer.

Many of the most successful consumer companies have invested millions of US dollars 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.

The presence of the fake stores in Kunming highlights China’s seemingly insatiable appetite for Western brands in some consumer segments that have not been tapped, particularly in smaller cities far from the affluent eastern seaboard.

“What these fake stores indicate is that there is demand for the types of products and concepts that these brands sell,” said Hong Kong-based Torsten Stocker, a China retail analyst with Monitor Group.

The problem for companies that have been faked is that even if the fake stores sell genuine products, the brands have no control over how customers experience their brands.

Zhang Yunping, 22, a customer service representative at 11 Furniture, is used to the questions about Ikea.

“If two people are wearing the same clothes, you are bound to say that one copied the other,” Zhang said, shrugging her shoulders.

“Customers have told me we look like Ikea. But for me that’s not my problem. I just look after customers’ welfare. Things like copyrights, that is for the big bosses to manage,” she said.

The owner of 11 Furniture could not be reached for comment.

Ikea said it has teams working at both the country and global level to handle intellectual property protection issues.

“Ikea as one of the biggest home furnishing companies in the world, protecting Ikea’s intellectual property rights is crucial,” Ikea China said in a statement.

At 11 Furniture — its Chinese name Shiyi Jiaju (十 一家具) sounds very much like Ikea’s Chinese name Yijia Jiaju (宜家家居) — furniture is made to order, not flat-packed as it is at Ikea.

Customers also notice other differences.

Ikea has nine stores in China, most of them in the wealthier coastal and southern cities. Xiao Lee, a Kunming resident who was shopping at 11 Furniture for a bedroom wardrobe with her husband, had visited Ikea stores in Beijing and Shanghai.

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