Tuesday, May 31, 2011

SE Asian consumers, low cost and fake goods

Consumers in South East Asian countries are famous for their love of bargaining. So even while super malls like Jakarta's Plaza Indonesia or Bangkok's Siam Paragon, or Manila's Makati Greenbelt are the source of all the world's major luxury brands, consumers still shop in traditional markets as part of their retail therapy. The Jakarta Post reports this week in advance of Indonesian holiday weekend of the continued success of the Tanah Abang traditional market in a Jakarta, a huge multi story emporium. The reason it attracts is the prospect of a bargain, and because without fixed prices Indonesians can indulge their favourite part of holiday shopping, namely bargaining. Prices can often be negotiated down 50%.

The continued strength of traditional markets despite the continued sprouting of glittering LV and Gucci filled glass and steel wonder malls is fueled also by the China ASEAN free trade agreement through which cheap manufactured Chinese goods flood markets round the region. The friction this has caused, because of the potential damage to indigenous manufacturers, unable to compete on price is reported frequently in the media.

And with cheap Chinese imports come counterfeit and pirated goods, which the Jakarta Post reports are widely available in Tanah Abang. With Indonesian Customs almost completely ineffective at preventing counterfeit imports, because of a lack of initiative and failure to put in place regulations to implement it's WTO commitments, fake goods continue to make up a large portion of the 'cheap Chinese imports' ending up on the shelves in Tanah Abang and the like, so spicing up consumers' shopping experience. Other notorious malls in Jakarta are Harcourt Glodok where every variety of fake electronics are available, Blok M and Pasar Baru.

The same is broadly true in the Philippines and Thailand. Manila's Greenhills, Divisoria and 168 Malls are hugely popular and common sources of cheap and fake Chinese imported goods. Customs and Police raids are frequent, but demand continues. Like Indonesia fake goods are mainly imported from China, and Customs seizures extremely rare as the Philippines IP border protection system is weak.

In Bangkok MBK Mall is raided on a routine basis by the Economic Police, for apparel, phones and other consumer desirables. And street stalls continue to sell every variety of fake goods all along Sukhumvit Road and across Bangkok. Perhaps the only difference in Bangkok is the prevalence of western tourists which adds to the local demand in a more visible way. IP holders seeking to stop the sale of fake goods feel more obliged to stop well heeled foreigners buying them.

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