Genuine brands or high quality counterfeits: An investigation of luxury consumption in China

• DOI: http://doi.org/10.1002/cjas.1416
• Author: Ling Jiang,Juan Shan
• Published date: 01 June 2018
• Date: 01 June 2018

Genuine brands or high quality counterfeits: An

investigation of luxury consumption in China

Ling Jiang

Peter B. Gustavson School of Business, University of Victoria

Juan Shan*

School of Management, Shanghai University

Abstract

This study examines the effects of different marketing and

manufacturing factors on the perceived quality gap and will-

ingness to pay (WTP) for genuine luxury brands. Using the

survey data of 786 Chinese consumers, the results show that

three marketing factors (product innovation, price promo-

tion, and sales environment) and two manufacturing factors

(production in country of brand origin and diff‌iculty in pro-

ducing the products) all indirectly inf‌luence WTP through a

perceived quality gap between originals and counterfeits.

These effects differ signif‌icantly among consumers with dif-

ferent counterfeit and genuine brand purchasing experi-

ences. For consumers with counterfeit purchasing

experience, it is important to emphasize the manufacturing

factors in the marketing strategies; however, for consumers

who only buy genuine brands, marketing factors play a more

important role. Copyright © 2016 ASAC. Published by John

Wiley & Sons, Ltd.

Keywords: counterfeits, genuine luxury brands, quality

perception, willingness to pay, China

Résumé

La présente étude examine les effets des facteurs

mercatiques et manufacturiers sur la différence de la qualité

perçue et l’envie d’acheter (WTP) des produits de marque

authentiques. L’analyse des données d’une enquête réalisée

auprès de 786 consommateurs chinois révèle que trois

facteurs mercatiques (innovation du produit, promotion du

prix et environnement de ventes) et deux facteurs

manufacturiers (production dans le pays de la marque

authentique et diff‌iculté rencontrée dans la production des

produits) inf‌luencent indirectement le WTP à travers l’écart

de qualité perçue entre les produits authentiques et les

contrefaçons. Ces effets varient énormément selon que les

consommateurs ont eu à acheter des produits authentiques

ou des contrefaçons. Les résultats montrent que les facteurs

manufacturiers jouent un rôle important dans les stratégies

marketing destinées aux consommateurs ayant acheté des

contrefaçons, tandis que les facteurs mercatiques jouent un

rôle important dans les stratégies destinées aux

consommateurs des marques authentiques. Copyright ©

2016 ASAC. Published by John Wiley & Sons, Ltd.

Mots-clés : contrefaçons, marques de luxe authentiques,

perception de la qualité, envie d’acheter, Chine

The growing sales of counterfeit merchandise constitute

a signif‌icant crisis for luxury brand industries worldwide. A

global study conducted by NetBase reveals that major

luxury-goods makers have suffered a severe decline since

2014, and China has experienced f‌inancial repercussions as

a result of the recession. It is generally assumed that the sale

of counterfeit products reduces the demand for luxury

genuine brands, even though some recent studies show that

counterfeits could raise the appeal of luxury brands in cer-

tain conditions (Randhawa, Calantone, & Voorhees, 2015;

Romani, Gistri, & Pace, 2012). As an attractive market

for international brands, the Chinese market is increasingly

threatened by the rampant counterfeiting phenomenon, es-

pecially with fast-developing local e-commerce (Atsmon,

Dixit, & Wu, 2011). Even more alarming is the fact that

counterfeiters are becoming increasingly professional, and

many of the highest quality fakes are sold with forged cer-

tif‌icates. Neuwirth (2011) showed that the high quality

counterfeits have such a strong resemblance to their authen-

tic counterparts that even their designers most likely could

not distinguish them from the originals. Consumers’

Ling Jiang and Juan Shan contributed equally to this paper.

This study is supported by the Humanity and Social Science Youth Founda-

tion of Ministry of Education of China (No.16YJC630015) and the Scien-

tif‌ic Research Foundation for the Returned Overseas Chinese Scholars

(State Education Ministry of China). The authors are very grateful for the

valuable comments and suggestions from the editor Prof. Kelly Main and

three anonymous reviewers, which signif‌icantly improved the quality of

the paper.

*Please address correspondence to: Juan Shan, School of Management,

Shanghai University, 99 Shangda Road, 200444, Shanghai, China. Email:

shanjuan@shu.edu.cn

Canadian Journal of Administrative Sciences

Revue canadienne des sciences de l’administration

35: 183–197 (2018)

Published online 29 November 2016 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1416

Can J Adm Sci

35(2), 183–197 (2018)Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. 183