Chinese New Year is a silk purse for New Zealand exporters, but rip-offs can make it a sow’s ear.
Whilst gift-giving is well behind us here in New Zealand, Chinese New Year celebrations are just about to kick off. It’s the year of the pig, a symbol of wealth, which fits perfectly with the Chinese New Year culture of spending money on your loved ones: giving the traditional red envelope filled with money, or other material goods. And given more than two billion dollars was spent over this festive season in 2018, the theme of wealth could not be more relevant.
It’s not news that China is a key market for our exporters; China is New Zealand’s largest trading partner for goods and services. For the year to June 2018, Two-way trade totalled $28.1 billion, with New Zealand exports accounting for $16.0 billion. China accounts for 20% of New Zealand’s total trade.
There is a massive opportunity for New Zealand exporters to capitalise on this retail moment, taking advantage of the popularity of New Zealand products in China and tailor marketing campaigns to the Chinese consumer.
For Ecostore, just to take one exporter, sales during Chinese New Year account for 9% of total annual sales and they anticipate sales will double, year on year.
However, with this golden opportunity comes a warning: During these peak retail moments, the number of counterfeit products is more prevalent for those premium products where brand and country of origin plays a part in purchasing decisions. This is not only damaging for those exporters’ products being imitated, but it’s damaging to our New Zealand brand and trade overall. New Zealand exporters need to protect their brand integrity, as well as our country’s, for our collective benefit.
One way to help overcome this problem is to ensure your brand is registered as a trademark – and the earlier the better. One of the challenges of IP registration in China is due to their ‘first-to-file’ trade mark law; people have the right to the exclusive use of a trademark if they’re first to register it, as opposed to most other countries where if you’re first to use the trademark you have exclusive rights.
And the repercussions of not being protected? IP law firm, AJ Park have had countless issues with Chinese companies filing trademarks and then holding exporters to ransom for financial gain. And who can forget the case of Apple settling for $60 million to access the rights to use the name iPad in China, after a local company proved it filed for it in 2000.
Another way to secure Chinese consumers’ confidence in buying legitimate products ‘of New Zealand’ is to look for the FernMark on the packaging. The FernMark is a Government-backed country of origin logo and consumers also have the option to scan a QR code for verification.
To date, we’ve had more than 6,000 scans of FernMark branded products around the world, of which 78% have come from Chinese consumers. Registered across 14 countries including China, the FernMark is a recognisable national symbol that authenticates a product’s New Zealand origin. The Programme offers exporters comprehensive trademark protection of its FernMark and monitoring of its use.
We employ the trademark registration and protection services of AJ Park who actively check no similar marks are being filed worldwide and use Yellow Brand protection to monitor the use of the FernMark on over 1,000 online trading sites within China and ensure products using the FernMark are exclusively those of our licensees. Action is swift and very effective, largely because of the government's endorsement of the programme. In the last 12 months, 202 products have been removed due to unauthorised use of the FernMark.
This type of service is particularly important for Chinese consumers who shop online and cannot physically verify the products. In an e-commerce world, this is critical; for example, a massive 95% of Ecostore products on Alibaba Singles Day were purchased online via mobile.
So not only is it important to register your trademark and copyright as early as possible in China, it’s also valuable to have the added layer of protection of a Government-backed programme like the FernMark.
The good news is, NZ Story can help. Check out nzstory.govt.nz/fernmark to protect your brand – and New Zealand’s – ahead of Chinese New Year.