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Kokuyo teams up with Chinese company that copies their products

Friday 10 April 2015

Japanese stationery and office furniture supplier Kokuyo has forayed into the Chinese market by teaming up with a company that counterfeits its products, according to Duowei News, an outlet run by overseas Chinese.
It has successfully partnered with a Taiwanese-funded company based in Zhejiang to sell high-quality products at half of their original pricing level. This strategy is quite common in Japan and many companies there are now applying it with some success to the Chinese market.
"We have developed new products on the basis of our exhaustive research of the Chinese market," said the company's China representative Katsuyuki Konishi. He said consumer preference in China is for slightly larger desks than the most common sizes in Japan and for office chairs upholstered in bright red, an auspicious colour in Chinese culture. These products have been successful since they went on the market in September.
Kokuyo has undercut other players in the market by about half but are competitive in terms of quality, thanks to the sources of materials provided it by the Taiwanese company. Kokuyo bought 15% of the company in 2011, making it a partner. This allowed the Chinese staff at the company to become more familiar with Kokuyo's production methods. Working with the company also meant that they could avoid conflict over intellectual property rights.
Kokuyo is not the first to use this strategy. Honda was one of the first Japanese companies to employ this method. In 2001, Honda decided to team up with a Chinese company producing counterfeit Honda motorcycles and then took advantage of the supply of low cost components to improve the competitiveness of its pricing.

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