According to Priscilla Wito’s blog post, Rotten Apples in China, fake products, and even fake stores, such as the Apple store mentioned in the post, are abound in China. In fact, based on my own experience shopping in China, these fake products are so commonplace that at any point in time while buying a product, it is more likely to be fake than real.
Despite all these fake products, there is also another consumer phenomenon sweeping the nation of China. As the economy is expanding exponentially and the new rich of the country emerge with it, there is an incredibly large growing demand for luxury products that have been commonplace in Western countries for a very long time, such as clothing brands, electronics, and etc.
Due to the extraordinary demand for these products, luxury brands, such as Prada or Gucci, can usually markup their products by 200-400% in the Chinese market, although a portion of that is used towards transportation and paying custom duties. Regardless, luxury brand’s profit margins are considerably higher in China than say, in Canada. For example, an average Coach bag in Vancouver is about $200 CAD but can sell for about $4000 RMB in China or roughly $715 CAD.