Fake products plague Korean exporters to China

The left hand product in each pair is an original Korean product while the right hand product is a Chinese counterfeit. From left is Nongshim’s Shin Ramen, Woongjin Food’s Jayeoneun and Binggrae’s Banana Milk.[JoongAng Ilbo]

When Woongjin Foods, a local food manufacturer, started exporting a bottled aloe juice called Jayeoneun to China in 2008, it didn’t expect that a few years later it would be battling manufacturers of counterfeit products.

In the first year of exports, Woongjin Foods sold 6 billion won ($5.9 million) worth of the product. In the following year, it sold 11.3 billion won.

The growth stopped when Made-in-China counterfeit products started showing up next to its product at supermarkets. They bore similar names, like Jayeonwoon and Jayeoneung.

There was nothing similar about their price, however. The counterfeits sold for one third the price of Woongjin’s best-seller.

Sales started plumetting. In 2010, Woongjin’s sales from Jayeoneun exports dropped to 8.6 billion won, and in 2012 to 4.4 billion won.

A greater challenge Woongjin had to face was when one of the counterfeit manufacturers applied in May 2009 to trademark a package design very similar to its own, featuring Korean letters.

“We had only registered the trademark in Chinese in January 2009,” said an official from Woongjin Foods. “We didn’t expect at all that [a counterfeit manufacturer] would take away the design rights of a [similar] label written in Korean.”

As sales continued to deteriorate, Woongjin Foods in December 2010 filed a lawsuit in a Chinese court against the manufacturer that trademarked the package. Woongjin Foods asked the court to give the design rights not to the counterfeit manufacturer but to itself.

To provide evidence to the court, Woongjin Foods submitted a copy of a newspaper advertisement of Jayeoneun that was printed in Korea in 2007 and a video of a television advertisement from the same year, but the Chinese court ordered the company to re-submit original prints or videos of the advertisements, not copies. It managed to submit the original documents as evidence and after three years and six months, Woongjin Foods recently won the legal battle in a final trial.

“This ruling has allowed Woongjin to keep in check other similar counterfeit manufacturers,” said Han Young-ho, an attorney for Woongjin in Beijing. “This has also sent a message to others that Woongjin will more actively take administrative measures against similar cases.”

Woongjin isn’t the only Korean company battling pirates in China. Other food manufacturers’ brands like Nongshim’s Shin Ramen and Orion’s Choco Pie are fighting counterfeit products being sold in China.

“Currently, we have employed local experts to collect evidence,” said an official from Nongshim.

Another victim is Binggrae. Last year, it expected to sell 25 million won worth of Banana Milk in China but it was only able to sell 15 million won because of counterfeits.

“The [original and counterfeit] products look similar but they are not exactly the same,” said an official from Binggrae. “This makes it difficult for us to take measures.”

E-Land in 2012 won a legal case against Chinese shopping mall Taobao, which sold counterfeit products of E-Land online.

BY CHOI JI-YOUNG [angie@joongang.co.kr]