China is simply a massive market growing at an astounding rate. The appetite for foreign brands and products is developing and evolving with every year.
For many companies China is still considered to be an untapped resource, offering huge potential sales and market share. However, these companies are also wary about doing business here for a number of very good reasons.
The possibility of trademark infringement is one very big reason.
Spot the Difference
Over the years, I’ve seen various trademark infringement cases in China. Some of these include:
Joint Venture (JV) between a Chinese company and a ‘foreign company’ breaks down and the Chinese company walks away with all the trademarks. This was probably registered/owned by the Chinese JV party and only at the breakdown does it appear how important ownership of this is. Albeit an old story, Danone vs Wahaha stands as an amazing insight in to the complexities of trademark ownership and infringement in JV’s.
(See: Danone vs Wahaha)
Trademark squatting – 3rd party companies/individuals that are keeping an eye out for products they think will enter the Chinese market and trademarking the names/possible names/future names/logos, etc and then using this to extort money.
(See: Reuters Article)
Competing companies with similar logo colour schemes and sounding names, seemingly hijacking an established international brand to launch their own business.
(See: Starbucks vs XingBaKe)
Traditional infringement claims – Companies identifying brands they feel infringe on their own trademark, but it is ruled this is not the case. China works on a first come, first served basis with regards to trademarks.
(See: Dell vs DeEr)
If you haven’t covered all your bases, you may find yourself in your own trademark infringement situation. The entity that owns the trademark can take you to court and attempt to stop you from selling that product/brand under that name in that location. If they are successful in their bid to stop you selling under that name, this will add weight to their case in other jurisdictions.
The following is a simplistic and very basic interpretation of what is going on with Apple’s trademark infringement case for the name “iPad” in China. The thoughts and views expressed here are my personal opinions.
What can we learn from the Apple vs Proview ongoing case?
Mmm... smells expensive.
In the early 2000’s Apple hired a company, Proview Taiwan, to purchase the trademarks for several product names in the Asia area, including in mainland China. I am told the agreement between Apple and Proview Taiwan for this work wasn’t well worded and contained some room for interpretation (some have called this sloppy legal work and poor due diligence).
Proview purchased the trademarks for iPad (amongst other names) on behalf of Apple, sold them to Apple and everyone moved on. Fast-forward a few years and pretty much out of the blue (although there has been rumours of this case for some time) an entity called Proview Shenzhen brings to light that they own the iPad trademark in mainland China and Apple is committing trademark infringement by selling iPad’s under that name. Proview Shenzhen takes Apple to court in Shenzhen and wins, paving the way for further trademark infringement cases against Apple all across the country.
Some of you may not have heard about the GRI from 1st March 2012 from almost all shipping carriers yet. But you will likely feel the pinch when you notice shipping prices for containers almost doubling after 1st of March.
Here is what is happening and what we’re being told:
Where & What?
The increases will be applied as follows:
Origin Range: From All Asian ports (including Japan, South East Asia, Colombo and Bangladesh)
Destination Range: To all Northern European ports (including UK & Ireland and the full range from Portugal to Russia) to West Med, Adriatic, East Med, Black Sea and North Africa.
Cargo: Dry cargo, OOG’s, Paying empties, Break-bulk and Reefer cargo.
Why?
While some carriers aren’t even offering an explanation for this price hike, others are using a variety of differing excuses. The most common the reasons being offered are: Read more…
As we read and see more and more in the news that Chinese exports to ‘developed’ countries are considerably reducing it is a time to be very wary about quality. While there is still strong growth from ‘emerging’ markets such as Africa and South America, the reduction in exports from the larger Western markets creates a pressure and strain on all the factories that rely on these orders to maintain their budgeted and normal business.
If Europe and US demand decreases further there will be steep competition between these factories. With this competition comes reduced price margins and this will likely mean compromise on quality as these factories fight to survive. When your products become secondary to the factory’s survival, it is time to spend extra attention to make sure you are still getting the quality you expect.
When the bottom line is threatened, this is when quality problems arise. Instead of focussing their energies on maintaining the standards of your product, factories will be trying to get as many of your products completed as fast as possible so the next order can go through. Factories will likely also attempt to bolster their profits by blaming wage increases and raw material costs. Short-sightedness being a regular player in Chinese business, many factories will let all this happen at the detriment of your relationship with them as a customer. Read more…
Recently I wrote about a little tree cone I found in my Mengniu yoghurt and how it bugged me to the point of never wanting to buy that product again. Today I read about how Wang Xiaoshan, a columnist, published a microblog post calling for Web users to boycott all Mengniu products. This was because it was found in October of this year that some of Mengniu’s products were contaminated with over double the national permitted level of Aflatoxin M1. This substance is reported to cause severe liver damage and liver cancer.
How did this carcinogen get in the products?
Reports are formulating that cows were given Mildewed feed which caused the high levels of this toxin in the milk. If the levels were twice the acceptable amount then surely the feed is allowed to be somewhat mildewed (mouldy) anyway. If your animals eat crap, then why would you not expect the product from them to also be crap? Did no one hear of the adage, you are what you eat?
The following is an article that was on the back cover of the Irish Times Business News Section, Friday December 23rd 2011. It was interviewed and written by Joanne Hunt. To view the full article on the Irish times website, click here.
WILDGEESE: EMIGRANT BUSINESS LEADERS ON OPPORTUNITIES ABROAD Shane O’Neill – Co-founder, Enter the Panda, Beijing
As seen in the Irish Times
“I WAS so sure I’d be back, I didn’t even visit the Great Wall,” says entrepreneur Shane O’Neill of his first visit to China in 2006.
Now a Beijing resident for more than five years and co-founder of Enter the Panda, a company that assists Irish and British SMEs doing business in China, the Dubliner says it was the country’s sense of scale and possibility that drew him in.
“I arrived in Beijing before the Olympics and there was massive development and great hype in the city. It reminded me of Ireland at the start of the boom, but on a much bigger scale,” he recalls.
“I just fell in love with the city and the idea of working here, so I came over and started studying Mandarin.”
Training in film in Ballyfermot College of Further Education, followed by a Fás course in new media and design, had led O’Neill to set up as a freelance web designer and strategist in Dublin. While business was good, he felt the work had become repetitive and so, aged 25, decided to take on a new challenge. Moving to China and learning Mandarin was just that. Read more…
The following is an excerpt from a China Daily European Weekly cover story entitled “Little to Cheer About”. It deals with the effects of the economic downturn on consumers, retailers and Chinese suppliers. David Bartram of China Daily spoke with Enter the Panda about our experiences on the ground here in China. To read the full article click here.
“There has certainly been a notable tightening of the purse strings this past year,” says Shane O’Neill, co-founder of Enter the Panda, a company that helps connect overseas businesses with Chinese manufacturers. “But from the retailers, distributors and small business owners we’ve dealt with, their focus has been on cutting costs without reducing the overall quality of their products.”
This will come as welcome news to Europe’s consumers this Christmas. One way consumers are looking to save is by doing their Christmas shopping online. In Ireland, 82 percent of shoppers will do at least some of their Christmas shopping online this year, spending an average of 155 euros ($205) each, according to research by Visa Europe.
“China has always provided online retailers with opportunities to undercut the bulk distributors,” O’Neill says. “To add a competitive edge, some online retailers now want to deal directly with factories in China. This gives them access to an infinite range of goods and services that allow them to develop new and exciting products for their home market.”
As well as online retailers, the economic slowdown this Christmas offers low-budget retailers in Europe an opportunity. High streets across the continent are seeing an increasing number of low-budget stores appear, and many source a lot of their goods from China.
The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions.
A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods.
The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries.
As an overview, we’ve taken the incoterms and simplified them. Call it a cheat sheet for anyone less familiar with international trade! Read more…
