Fake LV seller goes legit

Zhang Guidong, 43, used to sell fake LV and Gucci bags for eight years in Beijing's Silk Market before he decided to go legit. Since 2005, the man has instead run an authorized Hello Kitty store in the market.

The Silk Market, a shopping compound in downtown Beijing that lures foreign tourists with silk and knockoffs of foreign designer brands, is undergoing a yearlong upgrade. The market's managers say the number of stalls will be cut by half to stop trading of fake brands and low-quality products.

For vendors selling fake LV and Gucci bags for years, what is their possible option if they have to quit? Zhang may tell one way to go legit to survive.

Zhang's 13-square-meter pink shop, located in the children's wear section of the Silk Market, is packed with bags, wallets and kids' clothing, all of which carry Hello Kitty's face.

"All the Hello Kitty bags, clothing and accessories here are genuine," Zhang says.

"And inexpensive!"

Zhang has managed to secure good profits by buying some off-season items from suppliers at a 70-percent discount. "They sell well here as customers are from all over the world and visit in different seasons."

"The price is negotiable. For off-season products, I will sell, as long as my customers provide me a 10-percent profit," Zhang says. "Very often, I can earn more."

Zhang came to Beijing in 1997 from east China's Anhui province, and started selling fake LV bags at the outdoor Silk Market that year.

"Every stall then carried virtually the same products -- fake bags branded Gucci, LV and Prada," he says.

Business was good. Zhang and his wife bought their first apartment in Beijing in 2002. The couple, who had a son, decided to have another child. Their daughter was born the following year.

But their business was interrupted in early 2005 when the market was moved indoor. "The government suddenly got tough on knockoffs," Zhang recalls.

His stall encountered surprise checks twice in the following three months. He was fined 10,000 yuan (about 1,588 U.S. dollars) the first time and 30,000 yuan the second time. After the second raid, more than 10 vendors with larger stalls were evicted from the market.

"Back then, we were playing a cat-and-mouse game with the authority every day," he says. "But I gradually realized that I couldn't count on selling fake brands for a living. I had to find something else," he says.

Zhang chose Hello Kitty bags to test the waters.

"(Hello Kitty) looks cute. It's a recognized brand," he says. The man had his own way of doing business. He bought some knockoff Hello Kitty bags first.

"Sales were OK. Foreigners buy Hello Kitty too," he says.

But he got the cold shoulder when he visited the brand's regional office in Beijing.

The office told Zhang there was no point in speaking with him, because their products are meant for high-end shopping malls, not markets crammed with fake products.

Zhang, not discouraged, responded that even if they didn't provide him the products, he would keep selling knockoffs. "The reason I was here was the market had pressured us to change," he says. "They'd promised to protect these brands."

Zhang persuaded the Hello Kitty regional manager to visit the Silk Market and meet with the market's general manager. It took a few months before he finally won their trust and obtained authorization.

Zhang ditched his knockoffs and opened his Hello Kitty store. The Silk Market's managers halved his rent, as promised.

But Zhang found selling official merchandise to be much more difficult than he anticipated.

"I was bringing in only 100 yuan in profits a day, compared to the 1,000 to 2,000 yuan I was making with the knockoffs," he says. "The idea of turning back haunted me often."

But Zhang's wife, Wu Hongcui, was hesitant to go back. "I was worried about getting into bigger trouble," Wu, 41, recalls.

Then the couple heard about two people who received three-year prison sentences for supplying fake LV bags to vendors in the Silk Market.

"We had no (interpersonal) connections in Beijing. We couldn't afford to take a risk like that," Wu says.

At that year, their daughter was three and their son was 14. Zhang says he and his wife love Beijing and want to spend the rest of their life here. "We want a business that could last long, and pass it to our children, if possible."

Fortunately, their business gradually turned better as the couple brought in more Hello Kitty merchandise and learnt more about the brand.

"Foreigners aren't too price-sensitive and they love high-quality products," Zhang says. He opened a second shop in the Silk Market just one year after opening his first. His son is now taking care of the other store.

Ram, a Singaporean tourist who prefers to only provide his given name, says he appreciates the quality of the goods at Zhang's shop.

"I know this brand. It is of the same quality," he says after selecting a bag for his daughter. After wheeling and dealing with Zhang, Ram scored the bag for 70 yuan.

"It is much cheaper than in Singapore," says Ram.

In the Silk Market, it has become increasingly difficult for foreign tourists like Ram to buy LV, Gucci and Prada knockoffs.

Some of Zhang's former "colleagues" continue to sell fake designer bags, but they have moved to the underground parking lot.

They lead customers, mostly Chinese and some resident foreigners, to the parking lot and show them catalogues full of designer brands. After a customer shows interest in a particular bag, the vendor will call a co-worker and bring in the bags within minutes.

Zhang says the underground parking lot was packed with such vendors two years ago. But today, only around 10 of them remain.

"It's not easy to continue. The surprise checks are conducted often. But they say they want to hang in there for as long as they can," he said. "It might be even more difficult after the upgrade of the building."

Until now, Zhang can not make as much as he did selling knockoffs. But he says he is satisfied with what he has -- a 140-square-meter apartment, a Toyota SUV, a good wife and two lovely children.

"When I look back at the days I spent growing crops and breeding fish in a small village fifteen years ago, I feel lucky with what I have now," he says.

He pauses and jokes: "I started out breeding fish. Now, I sell cats."