From the ever-growing power of Chinese influencers to impact sales of luxury goods and beauty products, alike, and brands’ continued adoption of Asian ambassadors, such as Korean pop stars G-Dragon and CL, to help boost sales to Alibaba’s efforts to cut down on the widespread amount of fakes available on at least one of its platforms, and a significant win for New Balance in a China-specific trademark fight, the Far East has been a hotbed for legal and cultural developments in 2017. Here is a look at some of the key highlights of the year …
1. Chinese Influencers are Proving a Hot Commodity Among Western Luxury Brands. Zhang Dayi, Papi Jiang, Wang Tao, Fil Xiaobai, twins Viviandan and Miumiu, Ma Jianguo, Angelababy, and Aikeli Li. While these names may not mean much – or anything at all – to the average Western consumer, they wield a wild amount of influence in Eastern markets, and these Chinese influencers are giving their western counterparts a run for their money.
2. As North Korea Continues to Boost its Imports, a Look at the Role of Luxury in the Hermit Kingdom. “Most North Koreans are too poor and too hungry to think much about clothing in what may be the most authoritarian, least accessible state on earth,” according to the New York Times. While roughly forty percent of the population in North Korea – or about 24 million people – lives below the poverty line in the nation’s countryside and lacks proper medical care and medication, in Pyongyang, the capital of the Democratic People’s Republic of Korea, there is a vastly different picture of life, one that saw the country’s elite import $666 million worth of luxury goods last year.
3. Brands are Looking to Korea for Growth & Korea is Looking Right Back. With the changing tides of consumption and luxury spending and the introduction of new – younger – spending groups, luxury brands have had to tailor their approach. This has taken the form of brands enlisting Asian ambassadors for an extra push in the modern and changing landscape. These ambassadors range from K-pop stars like G-Dragon and CL to YouTube mega-stars like Irene Kim.
4. New Balance Handed $1.5 Million Landmark Win in Chinese Trademark Case. In what is being described as a landmark ruling coming out of China, a Suzhou court has ordered three Chinese shoemakers to pay more than 10 million yuan ($1.5 million) in damages to New Balance for infringing the U.S. sportswear company’s slanted “NB” trademark. The amount of compensation, “though small by international standards, is, according to lawyers, one of the highest to be awarded to foreign companies in trademark disputes in China.”
5. Korean Fashion Welcomes a New Guard, Rivaling the Traditional Fashion Capitals. “Korea is now what Japan used to be in the ‘90s. It has incredible popular culture. It’s a shout out and attention-grabbing in a way that’s very interesting.” This is what Vetements’ creative director, Demna Gvsalia declared last year when his brand debuted a capsule collection during Seoul Fashion Week. And he is right.
6. A Look at the Changing Habits of the Chinese Luxury Consumer. While consumption appears to be back on track in China (as indicated by luxury car sales, at least), why is China-specific spending on the industry’s most celebrated big fashion brands still falling?
7. Trump Authorizes Investigation of Intellectual Property “Theft” by the Chinese. This summer, U.S. President Donald Trump signed a presidential memorandum authorizing an investigation into China’s alleged “theft” of American intellectual property. According to the memo, U.S. Trade Representative Robert Lighthizer is being tasked with determining whether or not to investigate any potential trade practices by China “that force U.S. companies operating in China to turn over intellectual property.”
8. Intellectual Property Infringement Cases on the Rise in China. The number of intellectual property lawsuits filed in Chinese courts is steadily growing, and nearly one in six are being filed by non-Chinese entities. According to a report compiled by the Shanghai Intellectual Property Court, which reflects on the cases it oversaw in 2015, the majority of lawsuits were based on claims of trademark or patent infringement. The plaintiffs have included luxury brands like Burberry, Louis Vuitton, and Gucci, and Fortune 500 companies, such as General Electric, Hewlett-Packard and Microsoft.
9. Alibaba “Breaks New Ground,” Sues Third Party Sellers of Counterfeit Goods. China’s Alibaba Group Holding has sued two of the sellers of counterfeit Swarovski watches on its Taobao e-commerce platform, in what the Chinese e-commerce giant is declaring as “breaking new ground” in China. The lawsuit, which was filed in Shenzhen Longgang People’s District Court against Liu Huajun and Wang Shenyi, marks Alibaba’s first legal action against counterfeiters amid persistent allegations that fake goods are widely available on its sites.
10. Alibaba Files Second Suit Against Counterfeiters on its Platforms. Alibaba’s Taobao online marketplace has filed suit against a pet food seller for RMB 2.67 million ($386,564) in damages and legal fees, alleging that the vendor sold counterfeit cat food through its virtual Taobao store in violation of the e-commerce platform’s rules. In a civil lawsuit filed on March 3 in the Shanghai Fengxian District People’s Court, Taobao claims “the defendant, surnamed Yao, broke several of the trading platform’s regulations prohibiting the sale of trademark-infringing merchandise.”