Canada Goose Takes on Chinese Market More Used to Fake Parkas

(Bloomberg) -- Canada Goose Holdings Inc. is pushing ahead with its China expansion, betting its strategy of selling premium coats directly to customers will help overcome a proliferation of knockoffs and the nation’s consumption slowdown.

The Toronto, Canada-based company has dealt with counterfeits soon after it started selling globally two decades ago, CEO Dani Reiss said in an interview in Beijing on Friday. “We’re used to it,” he said. “It’s very important for us to protect our brand and educate the consumer so they won’t be fooled into buying a fake jacket."

Reiss faces an uphill battle in China, where many consumers were first introduced to the brand’s logo on an imitation parka, sometimes with “China Goose” emblazoned on the patch, and a map of the middle kingdom in place of Antarctica. The knockoffs can be found retailing for about 400 yuan ($58) on Alibaba’s Taobao, a fraction of the up to $1,550 U.S. consumers pay for the real deal.

Status Symbol

The brand took off in China partly after celebrities including billionaire Jack Ma were photographed wearing the coats. While the jackets have become a status symbol, the lookalikes found online may also be an effective marketing tool, according to Kantar Worldpanel analyst Sam Zhao.

“Lots of people may think they bought a version of a really popular jacket -- not even realizing that it is an imitation of a luxury brand," said Zhao. "But then they learn more about the brand and this helps spread the name."

While developing stores in China may help remedy that, Canada Goose will have to contend with rivals who have already made headway in the region. Its new Beijing flagship store will be on the same block as Italian coatmaker Moncler, which depends on Asia for about as much as 40 percent of its sales.

Reiss says he is no stranger to the Chinese consumer, given the number of tourists who shop at Canada Goose stores around the world. After launching a Tmall shop in September, a retail store in Hong Kong and an office in Shanghai, the Beijing debut is the next big step in a market with a “tremendously long runway,” he said.

At a pop-up store in Beijing on Friday ahead of the official launch, the company got a taste of demand for its goods. Eager shoppers arrived clutching photos of their desired models, took selfies and made calls to family members to weigh sizes and designs before choosing their luxury parkas.

Among the shoppers was Wang Weidong, a finance professional who had unsuccessfully tried to buy it at department store -- one of the few places where customers could buy the jackets in person. He picked out a black-label design that cost 9,100 yuan.

“I’m going to wear it until it falls apart,” he said.

To contact Bloomberg News staff for this story: April Ma in Beijing at ama112@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Sharon Chen, K. Oanh Ha

©2018 Bloomberg L.P.

With assistance from Editorial Board