Asia’s discount retailers are aping Japanese or Korean culture, but it turns out most of their products – and their operations – are from China. Is this necessarily a bad thing, when customers can’t get enough?<\/b>
\nO nly a decade ago, the term \u201cfake goods\u201d conjured visions of counterfeit monogram bags and other faux designer items. Today, the same label is being applied to a growing number of discount chains of questionable origin.
Miniso, Mini Good, Mumuso, Yubiso, Yoyoso, Ximiso, Ilahui, Nome, Youi\u2026 the long, ever-growing list of names sounds more like a children\u2019s rhyme than a tally of discount chains. But over the past few years \u2013 from historic shop buildings on the streets of Vancouver to glossy new storefronts of mega malls in Seoul \u2013 the world has seen the proliferation and rapid rise of dollar-store brands \u2013 many originating from China \u2013 selling everything from fuzzy bath slippers to brightly-coloured USB cables.
Miniso is at the helm of this trend. The retailer first emerged in 2013, and has become a global phenomenon over the past five years. Last year, with over 2,600 stores in more than 60 nations, the brand hit US$1.8 billion in sales thanks to its \u201cthree high, three low\u201d business model: high efficiency, high technology, high quality; and low price (products are priced between US$1 and US$30), low cost and low margin.
But while their products are well received, consumers remain confused by the brand\u2019s backstory.
\u201cWhen I first visited Miniso, I thought the store and its products were either from Japan or Korea,\u201d said Andrea Mak, a 36-year-old Hongkonger who frequents their local outlets. \u201cThe items they sold, like seahorse-shaped silicone tea infusers, resembled things you\u2019d find at Muji, while the shop decor was like being inside of Uniqlo.\u201d
Mak is not the only one to bring this up. Miniso has often been accused of copying several Japanese brands. When the retailer first appeared, with its now-ubiquitous red-and-white logo featuring a stylised shopping bag, many found its shopfronts and branding uncannily similar to Japanese fast-fashion brand Uniqlo.
Meanwhile, Miniso\u2019s minimalist homewares are viewed as being of a similar vein to Japanese lifestyle brand Muji. And finally, its business and retail model are often compared with Japanese discount chain Daiso. But perhaps the most serious claim the brand faces is one of cultural appropriation, as critics say the brand is trying to portray itself as culturally Japanese.
On its website, the discount chain calls itself a \u201cJapan-based designer brand\u201d founded in Tokyo by Japanese designer Miyake Junya and Chinese entrepreneur Ye Guofu. The company has since disclosed that the bulk of its operations is based in Guangzhou. Between 80 per cent and 85 per cent of its products are produced in China, and 10 per cent to 15 per cent are made in neighbouring regions such as South Korea and Taiwan, according to an employee at a Hong Kong branch.
These days, despite its claims of being headquartered out of Tokyo, Miniso is referred to as a Chinese company. Co-founder Miyake Junya has even been accused of being a hired actor. Most surprising, however, is that all this controversy has had little impact on the brand\u2019s astonishing success.
In September, Miniso announced that it received 1 billion yuan (US$143.97 million) in funding from Chinese technology giant Tencent Holdings and Hillhouse Capital, a hedge fund that made its name by being an early backer of Chinese internet firms such as JD.com and Baidu. With plans to undergo massive expansion in new markets such as Romania and India, Miniso has lofty ambitions to reach 100 billion yuan in sales and open 10,000 retail outlets by 2020.
Through its aggressive global outreach strategy, the brand even managed to become the first franchise in the world to open an outlet in North Korea. Miniso Pyongyang was ultimately rebranded as \u201cEvolution\u201d, due to the uproar over breaching Japanese and international trade sanctions on the hermit nation.
But the most telling sign of Miniso\u2019s success is the horde of other \u201ccultural copycats\u201d it has spawned.
THE \u2018KOREAN\u2019 MINISO
Since Mumuso\u2019s emergence in 2014, prominently sporting a \u201c. KR\u201d in its logo, the discount lifestyle retailer has often been accused of portraying itself as a Korean company, despite the fact that it is headquartered in and mainly operates out of Shanghai.
Mumuso has a registered office in Seoul\u2019s commercial Gangnam district, but local media claims it only functions as a paper company. And ironically, while Japanese-inspired Miniso has a growing retail presence in South Korea where its products have been well received, its purportedly Korean iteration has no outlets in the nation, given the criticism it has garnered abroad.
In August, the South Korean embassy in Guatemala took to Facebook to issue a statement about the retailer\u2019s South American outlets: \u201cMumuso has opened its stores at four major malls in Guatemala City and Mixco\u2026 They pretend to be selling Korean products, however Mumuso is not a Korean company and its products are not from Korea,\u201d the embassy said, according to The Korea Times .
In Southeast Asian countries such as Vietnam, however \u2013 where Korean cultural exports such as K-pop, K-dramas, and K-beauty have become wildly popular over the past decade, and where younger consumers dominate the retail market in a nation where the median age in 2015 was 30.5 \u2013 Mumuso is fast becoming a household name.
\u201cI know about Mumuso because my friends usually shop here,\u201d said Bao Ngoc, a 17-year-old student browsing a local branch in Dong Da district, Hanoi, where the retailer has opened more than a dozen branches in the past two years. \u201cIt\u2019s my first time here and I find the designs really cute. The price is good for students,\u201d he said, while inspecting a wall of pastel-coloured water bottles.
\u201cIs Mumuso a Korean company?\u201d said Trang, a 28-year-old entrepreneur visiting the store with her husband. \u201cI can see the labels say \u2018Made in China\u2019, but I thought they manufactured it in China while it was designed in Korea. Like that shop Miniso which is from Japan, but whose labels say \u2018Made in China\u2019 too.\u201d
Michael Hurt, a cultural anthropologist and lecturer at the University of Seoul, was shocked when he first came across the brand in Vietnam. \u201cI took all these photos of the shop,\u201d said Hurt, who has lived in South Korea since the early 2000s. \u201cThe Korean writing in the shop doesn\u2019t make sense and is grammatically incorrect\u2026 but to me it\u2019s ingenious because they recognise that there is in fact a Korean style for marketing, display, ads, photography and packaging.\u201d
And even if Mumuso manages to recreate the experience of shopping in a Korean store, this is not quite the same as how a factory might reproduce a counterfeit Louis Vuitton bag, he said. \u201cTo me, they\u2019re remaking the Korean aesthetic. But how do you copyright the Korean cultural aesthetic?\u201d
COUNTERFEITING CULTURE
Hurt poses a good question. Besides criticism from the Korean media and government, Mumuso was recently slapped with a series of fines totalling 100 million Vietnamese dong (US$4,281) for \u201cproducing and trading in fake goods\u201d, according to the Ministry of Industry and Trade in Vietnam. The ministry carried out an inspection of the retailer\u2019s goods and found that 99.3 per cent of 2,732 goods were imported from China, while the rest were bought in Vietnam.
But fines aside, most experts agree that governments and local firms have no legal grounds for claiming cultural appropriation. \u201cIn the case of Mumuso in Vietnam, the company wasn\u2019t fined for copying a culture, but for misrepresenting itself as coming from a specific location,\u201d said Christine Chen, an intellectual property (IP) and commercial disputes specialist and partner at Winkler Partners in Taiwan.
\u201cThis is quite common,\u201d she added. \u201cIt rarely involves an entire company and usually involves an individual product or the advertising, labelling or packaging of a product.\u201d
Most China-based or China-made discount brands, including Miniso, have yet to be hit with intellectual property lawsuits. This is because cultural appropriation is a grey area, Chen said. \u201cI can style my company like a Japanese company, and register my headquarters in Japan, and employ people from elsewhere to run the company. Am I a Japanese brand? Am I a Japanese company? Am I foreign company with offices in Japan? Or, like [clothing brand] Superdry, do I \u2018appear\u2019 Japanese even though I am from the UK?\u201d
In South Korea, French-inspired brands such as Tous Les Jours Bakery and Paris Baguette have done exactly the same, said Jaewoo Seo, a French-Korean branding expert based in Hong Kong. \u201cYou cannot imagine the number of shops Koreans go to just because they are \u2018French\u2019. But there\u2019s nothing French about them,\u201d he said. \u201cAs someone who lived in, and grew up in France \u2013 OK, we have croissants and baguettes but they don\u2019t taste anything like this.\u201d
Hurt from the University of Seoul cites the example of United States-inspired chains in South Korea. \u201cThere\u2019s a bar chain here called JS Texas, it\u2019s been here for decades. Lots of restaurants sell themselves as American, and they may not claim they are an American brand, but the accoutrements of the Americana aesthetic are there.\u201d
Adam Broinowski, a research fellow at the College of Asia and the Pacific at the Australian National University, says Japanese hamburger chains such as Mos Burger were similarly influenced by popular American brands and products. \u201cTo say there is an authentic Japanese style to a number of products is not strictly accurate. To put it another way \u2013 you don\u2019t have to be Japanese to run a sushi restaurant, nor do fish come with national flags attached to them, but everyone understands sushi to be a distinctly Japanese cuisine.\u201d
Ultimately, cultural copycat or not, experts say IP laws cannot be applied to Miniso and other similar brands. If products are marked \u201cMade in Korea\u201d, for example, but are actually produced in China, the producer should be punished, says Laura Wen-yu Young, a managing partner at San Francisco-based law firm Wang and Wang. \u201cHowever, there is no prohibition on creating a brand that simply sounds Japanese or Korean.\u201d
\u201cAn analogy is that anyone in the US or Australia can open a restaurant for foreign food, with a foreign name, decorations, et cetera without violating IP or other laws,\u201d she said. \u201cAnd this restaurant will succeed or fail on [normal] market principles \u2026 if customers think the fake Japanese food is lousy, the restaurant will fail.\u201d
Miniso, Mumuso, Yubiso, and Yoyoso did not reply to queries sent to them.
A DOLLAR A DOZEN
Culturally themed discount chains may seem new in Asia, but in Japan dollar stores have a long history. Japanese discount stores \u2013 better known as 100-yen shops \u2013 hark back to the small storefronts of the Edo period (1603-1868), when cheap household goods were sold for dozens of mon, a copper currency from imperial China.
The best-known modern version of the 100-yen shop is Daiso \u2013 the discount chain Miniso and other Chinese retailers allegedly modelled their businesses after. The company made its debut in 1977, had spread to South Korea, Canada and the United States by the mid-2000s, and is now in Australia as well as Hong Kong (where it is known as Aeon Living Plaza).
Despite the historical animosity between Japan and South Korea, some of Daiso\u2019s greatest overseas success has come in the latter country. Daiso Korea was launched in 2001, and has branches in almost every district of Seoul. Its online venture Daiso Mall has also been well received.
Experts say this is because of Daiso\u2019s carefully tailored cultural approach in South Korea. \u201cPart of what\u2019s going on with Daiso is that it\u2019s positioned as a [fully] domestic brand, even if it is [part-]Japanese. It\u2019s super cheap and super customised to Korean taste,\u201d said Hurt from the University of Seoul. \u201cBuying and displaying is done in a Korean way, not a Japanese way. You walk in and you feel as if this store was made for Koreans.\u201d
In 2016, sales in Korea reached 1.5 trillion won (US$1.32 billion), with experts predicting that the discount chain would surpass 2 trillion won in sales this year. Daiso runs over 1,000 outlets across the nation, and sells over 30,000 products in its stores, most of which are manufactured in China \u2013 but experts say this has little impact on sales or consumer sentiment.
\u201cThe manufacturing of Daiso products in Daiso-leased factories in China or elsewhere is obviously cheaper for the owners of the company than paying workers, overheads and meeting standards in factories in Japan. As long as that accessibility to cheaper conditions remains then much of Daiso production will be offshore,\u201d said Broinowski from the Australian National University.
\u201cClearly what matters for the company is to retain ownership over a design and be understood by the consumer as having an authentic everyday Japanese or Korean quality in feel, image and style. This seems to be the key to its success and its profit margins.\u201d
BUYERS WITHOUT BORDERS
While talk of ethics and cultural appropriation remain at the heart of the controversy with today\u2019s culturally themed discount retailers, experts agree what matters at the end of the day is the consumer.
\u201cThe first thing that occurs to me is no one cares if a product is culturally authentic or not. People care if it\u2019s authentic \u2013 that\u2019s what it comes down to,\u201d said Simon Collins, founder of the Fashion Culture Design Unconference and former dean of Parsons School of Design.
For instance, some of the brands that Miniso and others have been accused of copying are no longer even culturally Japanese. \u201cI don\u2019t think Muji or Uniqlo do represent a Japanese cultural brand. I think Uniqlo is 100 per cent international and there\u2019s practically nothing about it that\u2019s Japanese to the average consumer,\u201d Collins said, adding that one might recognise certain Japanese elements in their service \u201cbut even that is a bit of a stretch\u201d.
And while Muji does have what was once perceived as a Japanese style, \u201cmany brands now have this Muji-like aesthetic\u201d, according to Collins. \u201cMuji and Uniqlo are great brands and have strong images but I don\u2019t think they\u2019re quintessentially Japanese. They\u2019re quintessentially international.\u201d
The University of Seoul\u2019s Hurt says cultural appropriation is part of many industries, and tourism businesses promote this all the time.
\u201cIn Korea, there are hordes of Chinese people who come to Seoul, put on traditional Korean clothing, and go out onto the old streets of Samcheong-dong. They want to be Korean, and also want to exist in \u2018Koreanness\u2019,\u201d he said.
\u201cIt\u2019s the same exact thing for brands selling themselves as Korean brands. How do you crack down on \u2018fake\u2019 Korean brands just because they use hangul [Korean characters]? It doesn\u2019t make sense.\u201d
Cultural authenticity is an amorphous concept, said Young from law firm Wang and Wang. \u201cThere is not a statute to prohibit or define it, and I don\u2019t know how it would be defined in this age of globalisation,\u201d she said.
For instance, Young, says, \u201csardines\u201d no longer refer to fish caught only off the island of Sardinia, nor does Cheddar only refer to cheese from the eponymous English village.
\u201cMy sense is that the majority of Chinese consumers do not care about cultural authenticity, and most would be happy if they can get a local equivalent of a foreign product\u2026 In addition to fake Korean and fake Japanese [brands], there are a lot of popular brands that are fake English, fake French,\u201d she said.
\u201cSome of these are very successful, expensive, and sold in major shopping centres.\u201d
Collins agrees that demand will win out. \u201cI think if consumers want it, they want it. [Not] because it\u2019s culturally authentic. They want it because it\u2019s cool, which has always been the case,\u201d he said, adding that affordability and good value are part of that equation. \u201cI think we get too hung up on the providence of product. In the business we tend to agonise over cultural authenticity but the customer doesn\u2019t really care.
\u201cThis is not disrespectful to the customer,\u201d Collins added. \u201cThey are only required to decide to if they like it or not.\u201d \u25a0
Additional reporting by Trang Bui<\/p>\n