[dc]I[/dc]t's pretty well known that there's a large market of counterfeit cycling products, mostly coming out of China. What's been debated endlessly over internet forums and group rides are the merits of buying and using these counterfeit products, who it hurts, and if these products are really "OEM" (original equipment manufacturers) versions of the retail products you can purchase at your local bike shop. Opinions vary from the "sure, I'll try anything" to "you're as bad as a serial killer for purchasing these" and everything in between.
Most interestingly, there's been very little done about these counterfeits thus far. Sure, Ebay will occasionally take down a listing that's been reported enough times or a major manufacturer (Specialized and Pinarello jump to mind) will issue a release stating that their products are being copied and you should beware of the fraudsters. Until now, there hasn't been any active enforcement or shutting down of these Chinese retailers.
Until now, that is…
Who's Watching?
According to the government press release issued April 29th, these kinds of counterfeiting and sales issues are monitored by the "U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI)" divisions. On the previous Friday, these agents apparently seized 10 domain names and associated bank accounts that were retailing counterfeit goods. Reportedly, the ICE and HSI received assistance from Specialized and INVISTA (CoolMax and Lycra trademark owners) as well as SRAM, Cervelo and Pinarello, who all reportedly found that counterfeiters were targeting their brands of high end bikes and accessories.
According to the press release:
"The seizure of these domain names is an important tool in HSI's continuing efforts to protect the consumer from sub-par and dangerous goods," said Brian M. Moskowitz, special agent in charge of HSI Houston. "HSI special agents are also committed to protecting the rights of businesses that play by the rules so that they can remain competitive and support our economy."
The websites that were seized were directly retailing high end frames and accessories (think of a Specialized Venge frame for $1200 or a Quickstep jersey for $20) and were passing them off as the real thing. In reality, these items were simply copied from existing products, branded as the real thing and sold off to unwitting (or conscious but cheap) consumers. The websites listed as being closed down (and now displaying the image to the right instead of a homepage) includes the following:
- Ecyclingonline.com
- Cycleoutfit.com
- Ecyclingjerseys.com
- Bike-jersey.com
- Cycling-outfit.com
- Teamscycling.com
- Samewood.com
- Cycling-jersey.net
- Cyclingyong.com
- Yongcycling.com
What Does This Matter?
Well, from a business standpoint, all this Chinese counterfeit crap (and yes, I'll refer to it as crap since this stuff really is unabashedly low quality and low price) contributes to brand dilution for the actual company, and as a result, the end retailer. Local shops are undoubtedly getting inquiries about the cost of a bike, frame or accessory, and then being told by the consumer that "the same" product is available online for 1/4 of the price. So now you have a situation in the marketplace where this counterfeit supply is altering the supply/demand model for the product, as well as putting the company's reputation at risk. Per the press release:
The seized website domains infringed upon the trademark owners' rights by providing access to counterfeit merchandise that could potentially damage a company's reputation. Bike enthusiasts purchasing what they think is brand-name merchandise may experience problems such as badly fitting apparel or counterfeit bike carbon frames that could cause serious injury since they are unsafe to ride. Sales of counterfeit items threaten American jobs nationwide, especially in the bike shop network.
This brings up another point that's worth debating (and has been debated numerous times on many forums) which is the quality of these products. In the cycling world, reputation is very often based upon the quality of products and word of mouth advertising is a powerful tool in any industry, cycling or not. In the case of counterfeit bikes, quality control has been one of the major concerns, and along with that comes safety:
"Our engineers have tested counterfeit frames in our lab and frankly they don't hold up. They failed our impact and fatigue tests and the aluminum head tube cups de-bonded, making steering vague and loose – that is simply not safe," says Andrew Love, head of brand security at Specialized. "The counterfeiters just want to make a sale; they have zero interest in the customer. Our product integrity and rider safety are very personal for us."
Now I'm not suggesting that companies like Specialized are altruistic in any sense of the word. They care about their customer base from a standpoint of protecting their brand and increasing their market share, not from a "how are you doing buddy?" That's how almost all companies are that are for-profit entities. But the introduction of these knockoff products can certainly hurt their reputation when one of them fails, causes injury and starts making the rounds online. At least if the worst happens with a legitimate product, there are plenty of channels to go through in order to make things right. With a counterfeiter, you have no recourse other than to shrug your shoulders and ask "why me?"
It's also worth noting that quality control and marketing are two of the components that drive the market cost of a product. The counterfeiters are able to cut out quality control and can spend nothing on marketing (since the company they are ripping off has done all of it already) so they can sell items at dirt cheap prices. This means that, inevitably, some corners have been cut and you end up with a product that may or may not be safe to use. In this case, it appears that there were some issues with knockoff Specialized frames (breaking at the head tube was a common issue, if I recall correctly.)
Consumer Consciousness
For consumers, this news of domain seizure can only be a good thing. It will at least begin to stem the tide of counterfeit, possibly dangerous products coming to our shores. But in the absence of government control over all imports and a wholescale blocking of domains originating from China (although I'd be perfectly fine with blacklisting AliBabba…) it falls to the consumer to do their homework, make smart choices and consider the potential outcomes of their choice to purchase counterfeit goods. Hopefully, the consumer doesn't learn the hard way what cutting corners feels like.
