Recently, the innovative snack brand Single Grain achieved results in its anti-counterfeiting efforts. After being plagued by counterfeit and imitation products, Single Grain won court rulings in multiple cities including Harbin, Hangzhou, and Shanghai. Counterfeit brands were gradually removed from platforms such as JD.com and Tmall, clearing the path for the brand's continued development. Behind Single Grain's successful rights protection is a victory for all innovative products. However, a large number of innovative products in the FMCG industry are still being imitated.
-01- Innovative Products Repeatedly Imitated In China, no matter what the product, it cannot escape imitation. Not only Single Grain, but also new products like Hi Eat Home and Self-Heating Pot have encountered highly similar counterparts. Almost all products have met their doppelgangers. Online, when we enter the name of an innovative product, we find many similar products appearing. In the past, counterfeit products were only seen in rural markets, but now they are openly appearing online. If we say that imitations like Kangshuai Fu, Lei Bi, and Yue Li Yue are brand-oriented imitations, then today's counterfeits are more functionally oriented, targeting innovative brands. Consider the tea beverage brand Bianjing Tea House, valued at 200 million yuan and with tens of millions in financing, which was forced to rename itself to Fuji Peach Mountain due to counterfeits. Recently, the trademark dispute of Jiangxiaobai was settled by the Supreme People's Court, confirming that "Jiangxiaobai" belongs to Jiangxiaobai. This innovative brand in the baijiu category has seen rapid rise on one hand and continuous trademark disputes on the other over the past seven years. Imagine if "Jiangxiaobai" did not belong to Jiangxiaobai; it would be a devastating blow to this innovative brand. There are many such examples; imitation of innovative brands has become a common phenomenon. China has a broad and deep market and mature production supply chains, which not only lower production costs for imitators but also provide rich distribution channels. Apart from market reasons, often the source of imitation lies within ourselves. So, when your product is imitated, first ask yourself: Does my product have a technological advantage or a creative advantage? For example, an NFC juice requires fresh squeezing and pasteurization technology, which is a technological advantage. Another example is a product with comic-style packaging, which is creativity. If your product wins on creativity, then don't be angry if someone copies you, because ideas themselves are worthless. Unless you can make it impossible for others to copy. Secondly, if your product wins on technology, congratulations, your probability of being imitated is greatly reduced. But over time, technology can be cracked by others. At that point, it depends on whether you have applied for patents to protect your product. Therefore, the lack of patent protection for technology and creativity is key to why innovative products are repeatedly imitated. Of course, even if you protect your product with patents, imitation is still possible. For example, Deer Road Corner (Lu Jiao Xiang). You can imagine that once you had to queue for 5 hours to get a drink, but now it is almost driven to bankruptcy by counterfeits. Because Deer Road Corner, with only 75 official stores, faces over 7,000 counterfeit stores. Why did this happen? Because the Chinese market is too large, infringement is widespread, and it is not easy for companies to discover. By the time it is discovered, the counterfeiters have already formed scale and affected the product itself. When 7,000 counterfeit Deer Road Corner stores appear, even the genuine brand finds it difficult to protect its rights due to the high cost of enforcement. The reason Deer Road Corner was heavily counterfeited is not because it lacked trademark protection, but because it did not rapidly scale up nationwide. Another example is that popular innovative products are mostly online-focused, neglecting offline channels. When they later enter offline, they find many imitations already there. So if your product sells well, you should quickly occupy the market and more channels. If your funds are limited, invest in the channels with the most traffic. Even if someone imitates you, they will have no opportunity in the channels you have entered. Of course, another important reason is that innovative products do not value branding. What is a brand? A brand makes customers feel that this product is particularly delicious and that they will only buy yours in the future. But many innovative products amplify the functionality of the product while diminishing its brand identity. For example, the Double Yolk Ice Cream. There are over a dozen companies making this product in the market, with almost identical packaging styles. The words "Double Yolk" are very large, while the brand name is very small. But "Double Yolk" is just a product name, not a brand. So when consumers buy the product, they only recognize "Double Yolk" and do not care which company produces it. Thus, without a brand, the product loses distinctiveness. Without a brand, switching costs are low, making it easy for competitors to steal consumers. If the imitation is priced lower, it can be a fatal blow. Another point is that the cost of rights protection is really high. Even if you have applied for a design patent, if the other party makes slight modifications, it becomes much harder to collect evidence. Combined with the wide geographical distribution of infringement, the cost of evidence collection is too high. This is also why many products choose to remain silent when imitated. Therefore, you can judge whether your product is likely to be imitated from these points:
1. Is there brand promotion to increase consumer switching costs? 2. Have you applied for patents, including technical and design patents? 3. Do you have channel advantages to place your product where traffic is concentrated? 4. Do you have the awareness to protect your rights and face counterfeits directly? Of course, in China, all products can be imitated and counterfeited. What we can do is reduce the risk that counterfeits bring. For innovative products, what should be done?
-02- How Innovative Brands Avoid Being Counterfeited To avoid being counterfeited, a key point for innovative products is to build a moat for themselves. When facing imitation risks, this moat can help companies reduce risks and losses.
1. Use intangible assets to build a corporate defense wall Intangible assets here refer to your trademark, design patents, and technical patents. They can help you fend off some imitators. Especially, pay attention to applying for design patents to protect packaging and bottle shapes.
2. Build a brand to increase distinctiveness The meaning of a brand is not just awareness, but whether it can occupy consumer mindshare. With a brand, you have pricing power. For example, Self-Heating Pot. When young people think of self-heating hot pot, they first think of Self-Heating Pot. This is because Self-Heating Pot has built a brand in the self-heating hot pot category.
3. Increase customer switching costs Switching cost is customer loyalty to the product. For FMCG innovative products, you can enhance interaction with consumers by creating a public account and placing QR codes on products. You can also use short video platforms like Douyin to convey product information and build social channels with consumers, thereby increasing switching costs.
4. Rapidly expand channels Innovative products must rapidly expand channels and go where traffic is high. If you focus on online, do not neglect offline. Quickly occupying channels allows more consumers to remember you and form recognition of your product. Even if imitators enter, consumers will have the impression that you are the first.
5. Build your cost advantage Cost advantage means that your cost is lower, your price is cheaper, and you still make a profit. This is the most important point in market competition. A key reason why counterfeit products thrive is that their prices are lower than yours. Therefore, to reduce costs and maintain profits, you need to find breakthroughs in scale, process, location, and resources. For example, local specialties have resource advantages; others need to spend more to imitate you. For instance, in pastry products, southern tastes prefer sweet, while northern tastes prefer salty. The difference in taste means that southern imitators of northern products will incur higher costs.
6. Actively protect your rights When your product is imitated, you must actively protect your rights and not let it go. It may require a lot of time and energy, but once successful, it not only declares your product's brand sovereignty but also greatly increases consumer recognition of your product. Previously, we thought that as long as a product had quality, creative packaging, and a distinctive name, it would gain market recognition and consumer favor. But these are only product advantages, the source of market share and profit, not a moat against counterfeits and imitations. To truly give your product the ability to resist external imitation, you must build intangible assets, enhance brand influence, rapidly expand channels, increase customer switching costs, and build cost advantages. More importantly, innovative products themselves must have self-protection awareness and proactive rights protection actions, nipping counterfeiting and imitation in the bud.
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