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04

2014-08

Counterfeiting: A Malignant Tumor in the Coating Industry

Since when has the "Made in China" label quietly spread across the globe? Chinese manufacturing has become a culture, an image. However, in recent years, products made in China have frequently encountered quality scandals in the international market, such as toxic toothpaste, lead-containing toys, and seafood with excessive antibiotics. As a result, "Made in China" is facing an unprecedented trust crisis. This situation should not be the case. Anyone who understands Chinese products and the national conditions of China cannot draw such a conclusion. Some Western media have exaggerated the quality issues of Chinese products, which is clearly motivated by ulterior motives. However, another fact is that currently, the domestic manufacturing industry is plagued by counterfeiting across various sectors. Taking the paint industry as an example, there are more than 30 leading paint brands in China, with over 8,000 manufacturing enterprises, while the paint market is still dominated by "mid-range" products suitable for ordinary consumers. With the continuous exposure of counterfeiting news in the paint industry in recent years, some industry insiders claim that "counterfeiting has become a public nuisance in the paint industry." Reasons for Counterfeiting in the Paint Industry Why does counterfeiting in the paint industry persist despite prohibitions? Is it related to the low cost and high profit of counterfeiting, or is it related to the consumer environment? According to insiders in the paint industry, the fundamental reasons for counterfeiting are driven by profit motives combined with low costs. A factory with a few workers can generate an income of hundreds of thousands or even millions of yuan a year. Most counterfeiters rent houses in urban-rural fringe areas, which not only keeps costs low but also means that landlords generally do not care about signing rental contracts or registering the effective identity of tenants, providing certain convenience for counterfeit detection. Additionally, some unscrupulous printing factories do not require valid qualifications when printing, making it easy for counterfeiters to obtain packaging that imitates branded products. From the perspective of paint products, since paint is a semi-finished product, it is easy to make it look similar, but the actual quality can only be determined in conjunction with construction. It is difficult to distinguish authenticity at first glance, and once a can is opened, even if consumers discover it is counterfeit, it is hard to prove that it is the original product purchased from the seller rather than a switched product, making it difficult to hold the relevant counterfeiters accountable. Even if caught, the cost of illegal activities is much lower compared to profits, leading many to continue counterfeiting and selling fake products. In addition to these specialized counterfeiters, some paint companies also pass off fakes as genuine. China has tens of thousands of paint manufacturers, but most paint products are unbranded. To achieve sales goals, they can only package their products as branded ones, passing off fakes as genuine. Some consumers who knowingly buy fakes also stimulate the development of counterfeiting in the paint industry. Some contractors or laborers, in order to reduce costs and maximize profits, may request the purchase of counterfeit paint when buying paint on behalf of homeowners. In the construction market, some people may ask for cheaper branded products. Some agents may find the profits from branded paint manufacturers too thin. With rising costs such as rent and labor, agents who cannot make money may resort to counterfeiting, such as mixing one bucket of fake paint into ten buckets of real paint to lower costs. These are direct reasons leading to rampant counterfeiting in the industry. In addition to directly impersonating branded products, some counterfeiters deliberately blur the lines with branded products or add or remove words from the brand, making it easy for confused consumers to mistake them for genuine products. Consumers' limited knowledge of paint also provides a survival space for counterfeiters. Many consumers lack knowledge about paint, and even when purchasing branded products, they often do not understand the basic properties of branded products, making them easily misled by contractors or sellers. The desire for cheaper options provides the greatest breeding ground for counterfeiters. Why Does Counterfeiting in the Paint Industry Persist? To protect the interests of enterprises and consumers, various companies have put significant effort into anti-counterfeiting measures. Some companies have upgraded their anti-counterfeiting labels, adding more anti-counterfeiting features and methods for consumers to verify authenticity via phone. At the same time, they have upgraded packaging to increase the difficulty for counterfeiters, further enhancing anti-counterfeiting efforts. Companies need to strictly control their distributors. There are strict requirements for which series of products can be sold through different channels, and contracts with distributors stipulate that if they infringe on the company's trademark rights or sell counterfeit goods, the penalty can reach millions of yuan. Many companies have also established dedicated anti-counterfeiting departments, with staff regularly patrolling to detect counterfeiting and collaborating with relevant departments to combat it. Although there have been significant results, there are still times when it feels helpless. Counterfeiting in the paint industry is very secretive; merchants may only display one bucket of fake paint in their store, signaling to those looking for counterfeit goods: "I have stock here." In such cases, even if caught in the act, the small quantity means that merchants face little punishment. In some markets, they may even be banned from entering after it is discovered that they are anti-counterfeiting personnel from companies. Although anti-counterfeiting efforts are made every year, it remains difficult to eliminate counterfeiting, and the methods of counterfeiting are becoming increasingly innovative. Inferior paints are marketed under the guise of "health and environmental protection," while the methods of counterfeiting and selling fakes are evolving towards deeper and more hidden approaches. In response, industry insiders suggest that anti-counterfeiting efforts should concentrate resources, form a joint force against counterfeiting, and reduce the costs of anti-counterfeiting. At the same time, a combination of surprise raids and regular anti-counterfeiting efforts should be adopted, targeting both counterfeiting dens and sales points to compress the survival space for counterfeiting and selling fakes. In regions with conditions, resources should be fully integrated, utilizing the geographical advantages of associations and chambers of commerce to accurately target objectives.

04

2014-08

Coating Enterprises: How to Grow Bigger and Stronger

Under the dual impact of continuously shrinking external demand and a persistent decline in domestic economic growth, some industries in our country are currently experiencing severe overcapacity. This is particularly evident in industries characterized by economies of scale, where issues such as high capacity, high inventory, high costs, low demand, low prices, and low efficiency are very prominent. The overcapacity situation in the paint industry is also quite serious. With the current overall order volume not progressing quickly, it is essential to find ways to tap into the incremental market. The first change in color will bring about an increase in space. Secondly, if we want to explore market color changes in the incremental aspect, the requirements for other additives will also increase, thus finding value-added space.

04

2014-08

Four Major Development Changes in the Coatings Market in 2014

Half of 2014 has already passed, and in the past year, the Chinese paint market has experienced significant changes. With the intensification of competition in both domestic and international paint markets and the shrinking profit margins, small and medium-sized paint enterprises are struggling to survive amidst challenges. Looking back at the Chinese paint market in 2013, there are four aspects worth noting: 1. The era of low profits in the paint market has arrived. The trend of polarization in the Chinese paint market has become evident. Major paint brands are expanding their territory through the establishment of large and numerous stores, thanks to their strong financial backing and profitability. Meanwhile, small and medium-sized paint brands are leveraging their advantages of lower costs and prices to achieve thin profit margins through high sales volumes, competing in smaller regions.

04

2014-08

Current Status of Powder Coating Development

Powder coatings, as solvent-free coatings, do not emit solvents during the coating process, making them suitable for environmental protection requirements. The overspray powder during the coating process can be recovered and reused, which helps save resources. Powder coating is easy to automate in production. A single application of a thick coating can reduce the number of spraying times and improve labor productivity. The absence of organic solvents makes it safer during production and application. Powder coatings comply with the internationally popular "Four Es" (Economical, Environmental, Efficient, and Excellent Performance) principles. Types and Structure of Powder Coatings In North America, due to the implementation of total VOC emission limits and the establishment of regulations for specific solvents (such as xylene and toluene), ...

04

2014-08

Development Status of China's Coating Industry from January to May 2014

From January to May 2014, the fixed asset investment and the total retail sales of consumer goods in our country both showed growth compared to the same period last year; however, the total export value saw a slight decline. The structure of the "three driving forces" has not changed significantly, and China's economic growth is still mainly driven by fixed investment. The Producer Price Index (PPI) for industrial producers has increased compared to the same period last year. In the first half of 2013, the total output of the paint industry in China was 5.9836 million tons, an increase of 7.4% compared to the same period last year. From January to May 2014, the total output of the paint industry in China was 6.1303 million tons, an increase of 8% compared to the same period last year.

04

2014-08

Discussing the challenges faced in the development of architectural coatings.

The building materials market has found that there are currently as many as 10 marketing channels in the paint market, yet almost all of them have some vulnerabilities and certain risks. Due to the considerable benefits that celebrity endorsements bring to paint companies, many paint companies are eager to have celebrities endorse their products. However, this reflects a misunderstanding of brand building; whether it can effectively enhance brand impact is a big question mark. Many companies believe that the image of a celebrity equates to the brand image of the product, and that simply choosing a celebrity for endorsement will elevate the company's brand image, which in turn will boost product sales.

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