The creative European entrepreneurs went to China to teach our way to do things, because they think they know, of course, but what they don’t know is that they got easily stuck in one of the most primitive bates of Asian diplomacy. For years China has welcome their guests (colonists) without opposing any resistance and giving them free space to develop activities and business, knowing that after a while they would have became Chinese. It’s a reverse colonialism that has given great results for years and now that China is investing in other countries they certainly learnt what to do.
But let’s go back to our entrepreneurs: they came to China with this proposal: “Make me 5000 copies of this prototype for the cheapest price”. The proposal of the supplier will be: “the price of the product will be 1 euro each, but if you let me produce 20.000 and hit my market with the rest I can give you your 5000 for 0.75 euro each”. Of course the Italian entrepreneur will accept and this is the way we find a lot of reputed brands sold on the beaches all over the world.
Some very smart entrepreneurs told to the supplier that not only they wouldn’t mind, but he could keep the price the same, but give back the difference between 1 and 0.7 euros in a “different” way because they had companies on the trade market and they need that kind of money for a personal house on the hills or for the America’s Cup.
We are not talking of copies here, we are talking of the “original” product produced by the same supplier and sold in a different market; in Italy this way has a name and it’s called the “parallelo” (meaning “parallel”).
This is very smart at the beginning, but remember that if in Europe the target of customer that would buy a fake bag on the beach would never buy the same product for ten times the price in a shop, in China things are pretty different. You find these products in “standard” places and not on the beaches, luxury malls, top level multi brand shops with no shame.
So you find guys collecting food from the garbage wearing Dolce & Gabbana or Prada and the work is done… Bingo!
Here’s a nice way to destroy decades of brand positioning, and here’s why no Chinese understands why he should buy a Prada shirt in the official shop and spend so much money to look like the guy that searches food in the garbage.
This is the receipt for fashion, take it to a chair, a table, a sofa, a technological product and here’s how you destroy your future market in Asia.
