The Chinese are known for bootlegging many things, and now we can add retail experiences to the list. The copycat Apple and Ikea stores in China in the past weeks have caught people’s attention not just because of the high-profile targets, but because of the evolution it represents in intellectual property theft. These fake stores are not akin to the bootleg DVDs, handbags, and software of yesteryear. Instead, what’s being pirated in these faux retail stores is more sophisticated: not merely brand image, but also customer experience and retail operations.
In July, the writers of blog BirdAbroad were traveling in Kunming, China when they spotted an inordinate concentration of Apple stores in the neighborhood. They turned out to be elaborate fakes, copying the real Mac store experience to a tee. Everything from the employees, furniture, and sleek Cupertino finishes was there. Fake Apple products are nothing new in China, but what was especially notable about the stores were that they were selling real Apple products, it was the unlicensed locations themselves that were the fakes.
In an echo of the fake Apple stores, about a week later reports of a fake IKEA called 11 Furniture appeared as well, also originating from Kunming. Everything from the store layout right down to the blue and yellow bags and those little golf pencils was to be found.
Both the fake IKEA and Apple stores represent a sort of sea change in the land of piracy. “This is a new phenomenon,” Booz&Co retail analyst Adam Xu told Reuters. “Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats.” These are retail formats that corporations’ operations managers spend countless hours researching in order to tailor the desired customer experience. Granted, both the IKEA and Apple stores were less than perfect copies, but by mimicking the retail experience itself, the pirates are making huge leaps and bounds in undercutting the reputation and image (and profits!) of the original companies. Does this lend support to the corporations ultimately cooperating with the copycats? At least in that manner they’d be able to perform quality control in terms or service and product authenticity.
This is especially annoying for chains, because it also destroys their ability to boost demand by creating artificial scarcity. If Kunming is any indication, gone is the day that Apple could limit availability to maintain high prices where they did choose to open. Is this a more egregious form of piracy, or are the new retail pirates leveling the playing field?