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A Notorious China



China has been taged for selling fake premium goods for a long time. It is a paradise for people who cant afford the tag price of premium goods such as Tiffany rings, LV bags, and Rolex watches. But now it seems like China is transforming herself to the biggest authentic market place. And I believe this is just the beginning and this is driven by profits.


Money can make people do anything and this also includes protecting the trade marks and patents. From the article, Taobao is cooperating with premium brands such as Swiss Army knife, LV, Prada to protect their own profits. And Taobao loves to cooperating with them. There are two reasons behind this. Firstly, from the recent data by CNNIC (China Internet Network Information Center), online shoppers value TRUST(Positive Feedback) and Quality of the goods as primary concern to do businesses with the sellers. The demands for fake low quality of goods are starting to go downhill. Secondly, most of the Chinese companies want to be traded on the stock exchanges. In order to do that, the companies will need to pass the examinations from government's officials. If they want to be listed on foreign stock exchanges, they must undergo strict examinations by foreign government officials such as SEC. To monetize the services they are providing and starting to make some dough, becoming legalized is the most important process they have to go through.


This phnonemnon can be seen across industries. Chinese online video websites such as Youku, Qiyi and Tudo are the three biggest players in the market. There are various VCs (Venture Capitalist) who invest millions of US dollars into the project. Eventually they want to turn this investing capital into profits and selling their holding shares. So, becoming legalized and protects patent rights becomes their priority if they want to be listed on foreign stock exchanges. Now, you can only watch some videos on Youku if you are outside of China, because those videos are not authorized to stream outside of China. You have to pay some dimes to watch Hollywood movies. They are not free, but they are cheap. They are cheap enough to attract the customers to pay a little and enjoy high quality movies. I believe this is a successful example of profit sharing. Youku acts as a portal to provide online video services in China. Lionsgate, CNBC, Colombia movie makes are the content providers. As long as the market remain prosperous and profitable, this legalized process will not go extinct. Both sides of the companies have the incentive to maintain the clean market and order.