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    1. NewAsia is offline

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      #1

      Sourcing branded goods from Hong Kong safer than China? - Why is this

      Hi There,

      I have heard about Hong Kong being safer than mainland China for sourcing branded goods. Does anybody on Wholesale Forum know why?

      Thanks.
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    2. Thank you for this post:

      Ken Lam (13 Jul 2013)

    3. Otter65 is offline

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      #2
      Hong Kong is overall more evolved compared to China, because HK used to be a British colony and has inherited some of the Western legal system and therefore copyright protection. For this reason, some of the bigger brand name companies have authorized distribution channels in Hong Kong, but instead choose to supply retail direct in China due to the low copyright protections. The fact that these brands manufacture their goods in China doesn’t mean that they supply resellers direct from China; most brands reinforce strict distribution channels.

      The brand holders require factories in China that produce their brand name products to sign tight contracts which state that they are not allowed to sell any of the products they produce to companies other than the brand holder’s authorized distributors.

      Further, there are many factories in China that are producing counterfeit and fake products and selling them on the black market. This is why sourcing branded goods from China isn’t safe, nor possible.

      There are many legitimate sources in Hong Kong offering authentic branded goods, but these sources still need to be thoroughly verified like any other. Also HK isn’t immune to illegal imports from China, therefore some of its supply chain has been tainted.

      To verify a Hong Kong supplier you can

      1. Verify that their website is owned by a Co Ltd company

      2. Verify that the company is registered, by consulting the Hong Kong business registry: http://www.icris.cr.gov.hk/csci/ (use the Unregistered User option)

      When dealing with a Honk Kong company you should also make sure that they are not just an offshore / shell company. A lot of Chinese mainland suppliers set up offshore companies because of low tax opportunities in Hong Kong.

      Since an offshore company does not have a physical presence in Hong Kong, if a dispute arises from any transaction you will only be able to run a case against a shell company, which can be easily closed down, and you will not be protected in China because you are dealing with a Hong Kong company.

      To check if you are dealing with an offshore company you can

      1. Call their company number to see if anyone answers. Of course they could be redirecting the number to a mainland China line.

      2. Visit their actual address or make use of a sourcing agent in Hong Kong or from your country (possibly with experience dealing with Hong Kong suppliers).

      3. Check if their company account is with a small foreign bank. State-run banks like Commercial and Industrial Bank of China, Bank of China and China Construction Bank are very strict in opening company accounts and state-run banks are way safer if you are going to pursue your rights in mainland China.
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    4. Thank you for this post:

      SpongeBobSquarePants (27 Sep 2011), realtopmall.com (10 Oct 2013)

    5. NewAsia is offline

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      #3
      Thanks for the quick reply Great info

    6. Angela is offline

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      #4
      I am feeling ashamed

    7. WholesaleForum's Avatar
      WholesaleForum is offline

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      #5

      Quote:

      Originally Posted by Angela View Post
      I am feeling ashamed
      If your shame leads to action, you shouldn't feel too ashamed, take action and make a difference.

      What China has to realize is that, long term, protecting copyright is in its own interest. Probably China will begin to protect copyright seriously only once it has enough home bread copyright to protect. Delaying protection will only antagonize its image with the countries / people whose copyright was infringed.

      Another argument is that copyright infringement leads to further innovation. Many supporters of the counterfeits trade argue that infringing on copyright is acceptable because if a product can be easily copied it means that it doesn't innovate enough to prevent copying. While legally speaking that is a flawed argument, economically this will lead to further innovation outside China, and tougher competition even when China just tries to imitate.

      Hope this makes sense.

    8. Amyshenzhen is offline

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      #6
      It depends on what kind of brand and how much do you buy. As you know cheaters are worldwide not just only China.

      Most of Chinese are honest and friendly.

      For example, if you buy Nike shoes which marketing price are US$50 and Chinese supplier quote US$10 with big quantities. In that case you should be careful and pay more attention.

    9. Thank you for this post:

      Forest (04 Sep 2013)

    10. ozwholesale is offline

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      #7
      It may be because suppliers of fake goods use the term chinese wholesalers because they know that's where most of the searchers try to find the cheapest goods

    11. IMEX Sourcing Services's Avatar
      IMEX Sourcing Services is offline

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      #8
      Well the reason why Branded goods are cheaper in HK is due to the taxation system in China. Lets take an example:

      * iPhones are manufactured in China, but cannot be sourced directly from here, they are usually exported out of HK and then re-imported back into and after paying customs etc..are more expensive than that in HK. For e.g. the iPhone manufacturing factory is in Shenzhen, but iPhone 4, the last time I checked was 4500RMB in HK while it was 5000 in Mainland China.

      * HK Tax laws are friendly to big brands, hence even people from Mainland China go to HK to shop for cheap branded goods..where China is definitely preferred destination for non branded/fake branded goods manufactured in china.
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    12. SpongeBobSquarePants is offline

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      #9

      Quote:

      Originally Posted by Otter65 View Post
      Hong Kong is overall more evolved compared to China, because HK used to be a British colony and has inherited some of the Western legal system and therefore copyright protection. For this reason, some of the bigger brand name companies have authorized distribution channels in Hong Kong, but instead choose to supply retail direct in China due to the low copyright protections. The fact that these brands manufacture their goods in China doesn’t mean that they supply resellers direct from China; most brands reinforce strict distribution channels.

      The brand holders require factories in China that produce their brand name products to sign tight contracts which state that they are not allowed to sell any of the products they produce to companies other than the brand holder’s authorized distributors.

      Further, there are many factories in China that are producing counterfeit and fake products and selling them on the black market. This is why sourcing branded goods from China isn’t safe, nor possible.

      There are many legitimate sources in Hong Kong offering authentic branded goods, but these sources still need to be thoroughly verified like any other. Also HK isn’t immune to illegal imports from China, therefore some of its supply chain has been tainted.

      To verify a Hong Kong supplier you can

      1. Verify that their website is owned by a Co Ltd company

      2. Verify that the company is registered, by consulting the Hong Kong business registry: http://www.icris.cr.gov.hk/csci/ (use the Unregistered User option)

      When dealing with a Honk Kong company you should also make sure that they are not just an offshore / shell company. A lot of Chinese mainland suppliers set up offshore companies because of low tax opportunities in Hong Kong.

      Since an offshore company does not have a physical presence in Hong Kong, if a dispute arises from any transaction you will only be able to run a case against a shell company, which can be easily closed down, and you will not be protected in China because you are dealing with a Hong Kong company.

      To check if you are dealing with an offshore company you can

      1. Call their company number to see if anyone answers. Of course they could be redirecting the number to a mainland China line.

      2. Visit their actual address or make use of a sourcing agent in Hong Kong or from your country (possibly with experience dealing with Hong Kong suppliers).

      3. Check if their company account is with a small foreign bank. State-run banks like Commercial and Industrial Bank of China, Bank of China and China Construction Bank are very strict in opening company accounts and state-run banks are way safer if you are going to pursue your rights in mainland China.
      This is impeccable info, I couldnt have put it better myself :-)

    13. Lex.Chen is offline

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      #10

      Quote:

      Originally Posted by SpongeBobSquarePants View Post
      This is impeccable info, I couldnt have put it better myself :-)
      That's called professional :-)

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