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LEGO fight Against Chinese counterfeit LEGO
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As for seizures of Best Lock, have there been any since they started their legal battle with LEGO back in 2012? The case is still crawling along.
Where we see most sales is on AliExpress - which is in English, Russian, Portuguese, Spanish, French, German, Italian, Dutch, Turkish, Japanese, Korean, Thai, Vietnamese, Arabic, Hebrew and Polish. Oh, and I presume Chinese. That seems to cover and awful lot of the world. They ship to so many countries it's too much like hard work to count them, let alone list them. It's parent, Alibaba, shifts something like five times the number of items achieved by the mighty Amazon.
You need to get out more.
Ooh - finally, a legitimate criticism! If you believe the figures are particularly important.
Somebody was saying LEPIN probably don't produce very much - if they're being seized in that sort of volume, that can't be true.
[Incidentally, do you realise that container ships typically carry in excess of 10,000 containers (more if they're only 20-foot containers)?]
Not exclusively, by any stretch of the imagination. But why on Earth are you trying to apply Western distribution models to countries that don't use them?
And it's a ship I'd love to see.
Of course, LEGO presumably had a market opportunity that they could have somewhat profited from if they'd tapped it. But now Lepin have moved in, I suspect they're a bit less likely to do so.
That's rather unambiguous. And that was the main subject of my post.
Btw, yesterday was International Peace Day. Make peace, not war :D
https://www.aliexpress.com/item/2015-New-377pcs-optimus-prime-Transformation-Robot-3D-DIY-building-blocks-sets-enlighten-children-toys-Legoe/32616905159.html
I think Lego is doing a serviceable job of addressing the market demand. If they followed the wishes of a tiny minority of AFOLs, I would have my UCS Serenity, and Lego would have a LOT of red ink and bad sales. I could probably UCS B-Wing my way into an entire fleet of Serenities well below RRP. There would be re-issued modulars that would also not be profitable enough to sustain the new and exciting sets that we all actually want.
Blah.
Then LEPIN released whichever iconic set came first. TLG would've quickly realised that there was probably little they could do to stop it through legal action, but they should also have realised that it was unlikely to be a one-off and come up with some sort of plan. By the time the third set hit the streets, that plan should've been rolling.
What have the two got to do with each other? I suspect the easiest way of dealing with the copied sets is simply for TLG to release their own in direct. competition. The snag is that they would have to do something about the price - and they won't do that.
One of the reasons that TLG may have decided not to re-release sets is that it may not be particularly profitable by their standards. But it is viable - LEPIN wouldn't continue to do it if it wasn't. What LEPIN can do, so can TLG - if only by setting up a clone (!) of the company. It would probably have seen the end of the LEPIN - or at least they would've realised that it's not a good idea to tweak the tiger's tail by copying their sets. TLG wouldn't even have to go mad releasing them - some of the enthusiasm for LEPIN sets, particularly in the West is because there's no real hope of TLG releasing them. If there was a shift in TLG's policy, even if just on a long-term basis, there would be less interest in the LEPIN versions.
LEPIN are not going to harm TLG, at least in the foreseeable future, but the latter have their sights set on Asia as being a market in which they can expand. We've already seen the business of "LEPIN compatible" - that's not good. Now, that might be a bit tongue-in-cheek, but it's still important. Most of the listing is in Chinese so I don't know what it says, but the seller wants to make money. He or she is not going to jeopardise that by using "LEPIN" rather than "LEGO", or even something else, so LEPIN must be a fairly familiar brand out there - and probably more familiar or desirable than LEGO, otherwise that's what they would've used. This is all in a market where TLG hope to grow. They don't have a more-respected brand name. They don't have better designs - as LEPIN's are the same! The quality is similar. And they're more expensive. TLG might've been able to use the cachet of being Western - but Westerners now seem to like LEPIN too; so why shouldn't they. Given all that, why should TLG stand much hope of achieving their aims?
The situation has arisen because LEPIN listened and dared to hope, and because TLG didn't and, more importantly, didn't think through the consequences.
How long could it take? Not long at all, after a bit of inertia for the first set or two.
Where were LEPIN a year or two ago? And where are they now? They have a much more impressive product line than TLG because they only have excellent sets, without any dross. TLG could do the same, but they'd have to change the way they think. Perhaps that means different division focused on different goals. Apparently, everybody wants the castle and the train. So why on Earth are they producing anything else until they've satisfied that demand? That tends to ignore the fact that they have vast production facilities and producing popular sets doesn't instantly block everything else. Would anybody even notice if they dropped a few of the more mundane sets - sets that people don't even know exist.
For example, a 10179 preorder where say 100 sets are ordered. Enough bricks are shipped to one address, bagged and boxes and posted directly using a local courier.
2 weeks later it's a modular or something. Easy done.
Half a dozen people packing specific sets (like UCS) in batch form at special order pricing would be almost profitable so long as it doesn't have a top heavy management system. There's probably ample room somewhere in Lego's manufacturing complex to set it up.
Would significantly reduce sales from a company like Lepin in the western world.
Problem solved.
Theres nothing but $$$ stopping lego from making a small batch AFOL branch for old sets.
HH is also marked as 限量版, which translates as "limited edition". However, I'm inclined to think it is limited in time (just for Halloween) rather than number.
If I'm not mistaken, the first copied Modular building, Brick Bank, was released in May this year. Now they have released all eleven, with Pet Shop being the last, in a span of five months. It's phenomenal.
By copying all the big and valuable sets, Lepin has caught attention, but it has also taken all the heat. No one is talking about the other 101 copycats, only Lepin. :-D
Do they actually get much heat locally? I can't see that they would be particularly bothered about what Westerners have to say.
A small number? Not too long ago, TLG themselves thought they could do this for single copies. It was called LEGO Factory. It didn't work because it was too expensive - probably for both TLG as well as the customer. However, if their initial analysis showed it was something worth pursuing, it's likely to have been marginal. Ramping it up from single copies to a small number would make it viable, and more so as the number increased.
What a load of rubbish...
It would have been bad if TLG had dismissed the completely dismissed the idea. I don't know whether they did that, or whether they just shelved it for possible consideration at a later date. What they did or did not do doesn't change the idea that a complete dismissal would've been wrong, and is not an option they should've considered for too long, or followed - whether they did or not.
I'll still say the big Lepin sets are by no means cheap in developing countries, but at least now they are not unattainable.
Lepin really caught everyone by surprise, I think, with their quality and speed.
In other news, UCS MF has shipped. Will this be the SHTF moment? Or will nothing happen, as before?
1. They have a somewhat sizable team and production capacity.
2. The large AFOL-oriented sets have sufficient demand to warrant almost their full attention. If I'm not wrong, their Ninjag and Star Wnrs sets are taking a backseat.
All of this hits me as a low-production smash-and-grab mentality that will sell a few sets, but isn't a sustainable model. Once they hit all of the EOL and current sets, where are they going from there?
So with regard to SHTF, I'm not sure that's what happens. A few people will have wanted the Falcon for a long time - enough to cross the line. The same is true for most (by that I'm not including sets TLG is currently producing) of the other sets - a few people for each. However, having made one purchase, the second becomes easier because both the product and the order process prove themselves. It's something that grows exponentially.
I think something that's likely to make a big difference is when somebody works out a better supply route. At the prices you, personally, are paying, it's no big deal, but the prices on AliExpress work against repackaged sets, that may not be quite complete, take a month to arrive and where the returns process may become rather complicated and totally unfamiliar. Fix some of that and then the brown stuff may indeed hit the impeller.
Because it has bought them things like "LEPIN compatible" labelling from other manufacturers. Recognition from your peers is an extremely high accolade! It's also a powerful tool when TLG try to expand as they have declared.
That attitude is also making a the same old mistake - it assumes that LEPIN operate in the same old ways with which we are familiar, or think we are (i.e. TLG's). TLG seems to produce a large number of one set, and then move onto another. Obviously they are doing this with many sets at a time. Perhaps LEPIN, with fewer production lines, aim to rattle through a different set every day of the week. At the end of the day, the amount of product would be the same but it means that everything is always available (if there's a delay, you don't notice it because it's only a couple of days). It also means that you're not holding large amounts of stock of any one set. It's JIT manufacturing - if they can do it in the particular market, then it works. They can respond to this week's sales figures this week, not next month.
As should be evident by the DS and other zombie-life sets like the Tower Bridge, Pet Shop and VW Camper Van, if the sets sell at a certain consistent level, Lego will still continue to make it available for an extended period of time.
Something else to consider is the cost of production. I don't mean that LEPIN don't have the design costs that TLG do, but how much does it actually cost to produce a genuine LEGO set? Not a lot, and in China, it's even cheaper.
They also have a rather different attitude to profit and are happy with much smaller margins.
For how long did the Death Star sell? And TLG still think virtually the same thing will continue to sell now. The ongoing volumes are probably low but does that matter if you have a large range? If all the modulars were still available, would they all continue to trickle off the shelves? The problem is that doesn't work in a real shop because you have to have space for them all - but we're in the Internet Age now.
There's an awful lot of choice. Just buying modulars at one a month would take a year - by which time there'll be another, courtesy of TLG! If they do run out of models, they don't need to stick to copying their sets - there's huge number of excellent MOCs out there that have probably already been salted away. They already know which ones are popular, so it's just a matter of reverse-engineering them. That's not as easy as their current method, but the market is far bigger because there won't have been a prior LEGO version.
What's that got to do with anything? When The Disney Castle was at what would probably prove to be its most popular, just after launch, LEPIN produced their own version. Just because a LEGO set is still current, it doesn't preclude another manufacturer successfully selling exactly the same thing - especially if it's cheaper.
Of course, if there is a competing product, perhaps that "certain consistent level" wouldn't be particularly high.
What suprises me is the sheer variety of bricks being produced so quickly, and not just the fairly standard ones found in the modulars, or rigging from the MF or masts for the IF but a whole range of technic for the Porsche. Something doesn't quite feel right.
As far as Lepin being able to make parts so quickly, I'd be willing to bet a bunch of bricks that Lepin has the exact dimensions for each piece that is going to manufactured in the LEGO factory, along with any manuals that are going to be printed, along with the specifications for all the machines used including the molds. All provided to them for a fee courtesy of the Chinese government official that is "helping" TLG do business in China. My old company ran into the EXACT same thing years ago.
I'm sure Lepin has had the mold designs for months, and it wouldn't take long for the plastics experts at Lepin's parent company to formulate a plastic that closely simulates the formula used by TLG.
I've been reading up lately on business columns and articles concerning doing business in China, and I feel that the outlook is grim for TLG. From what I am reading, the Chinese government is making it harder and harder for foreign companies from doing business there, there have been many law suits involving IP theft that have favored the thieves, and there is a big push for Nationalism going on, which means the Chinese only want to buy stuff from Chinese companies. In this case, Lepin would be the winner.
TLG dragged their feet too much in opening a factory there. They started building the factory in 2015, and it is taking until 2017 to get operational? That gave Lepin almost 2 years to establish itself. I predict at this point that TLG is going to be the loser in the Asian market.
http://brickset.com/article/23648/the-lego-group-takes-action-against-clone-brand-lepin
Clone manufacturers have made pieces from LEGO designs that have never made it into production, and have never been anywhere near China. The manuals are freely available and can be printed in a blink of an eye. The ABS is commercially available, as are the machines. None of it needs any kind of industrial espionage. Nor is any of it rocket science.
Going back to the very beginning, it would take one person a long time to spec out all the pieces for all of the sets that Lepin currently copies (before they got up an running). So long that it wouldn't be possible to do to get to market quickly. That means that it would take a team of people to do it. That means that a team of people copying specs so accurately that they are indistinguishable from LEGO pieces (tolerance-wise). I find that scenario highly unlikely, I mean I guess there might be a company or something in China that markets itself as "The Measuring Company - No Job Too Small Or Too Big For Us To Measure". Maybe.
What if instead of using a bunch of people to measure the pieces, you cut that time down to a couple of hours out on the town along with a nice wad of cash? Then have one or two designers fill in the gaps for the older pieces. Knowing that buying designs is part of the culture, which do you think is the likely scenario?
Either way, you have your theory, I have mine. As far as I know, neither of us has Lepin contacts or has seen the Lepin version of a factory tour. So it is just conjecture on both of our cases. No need to argue back and forth about something that neither of us can prove yet.
There is a long and well documented recent history of industrial espionage occurring in Chinese manufacturing plants. It's hardly a logical leap to wonder if it could be the case here too.
It gets rather tiresome the way that everything appears to be the fault of the Chinese - simply because they are Chinese. LEPIN was assumed to be poor quality, and people repeatedly stated it - because it was Chinese. I used to argue against that; now, most people, but not all, have accepted it as not being true. The Chinese do things differently to us, and it's therefore wrong. The Chinese have different attitudes to a number of things, and they're wrong because they aren't the same as our own.
Other countries are, of course, squeaky clean. There's no espionage or corruption. You usually have to go a long way, with a lot of evidence, before they even become a possibility. But with the Chinese, and with evidence that actually points in the opposite direction, they immediately become candidates. Most people don't even know who LEPIN are, or even if they actually are Chinese.
And to be fair, if one country engages in practices that the entirety of the rest of the industrialized world considers "wrong", then those practices probably are indeed "wrong". Note, this doesn't cover ALL the practices we are talking about. As you say, some are just different. But some are undoubtedly "wrong", based upon accepted worldwide standards.
There are a few countries that wouldn't go along with that. By the time you're finished, the population of China on it's own would exceed what you're suggesting is a majority! And which, clearly, it isn't.
I wouldn't make any claims on that basis as I think you'd find that it's a pretty close-run thing. That, again, is not how we traditionally see things.
But I didn't intend to get this political, and I don't want to go any further down this rabbit hole. In general, I've agreed with you a lot more than not on this thread, and I was merely trying to point out that perhaps you need to be a little more open-minded to opposing views- something you have consistently asked others to be towards Chinese views. Seems reasonable to me. Oh, and perhaps a bit and less defensive (of Chinese actions) as well. It's like a automated trigger response with you anytime anyone mentions anything that may be remotely critical of the "Chinese way"
That's skewing things without any justification. How many nations hold "dim views" of some Western nations; do people in those nations pay them any heed?
I don't really hold a view with regard to the Chinese clone manufacturers. The only relevance of the country is that it requires a realisation that their thinking is starting from a totally difference place. To some extent, that's true for all nations, but it's more significant the further apart the cultures are.
In a sense, I'm trying to work out where all of this is heading. For that, facts are required. That's hard because it appears you can only get any of those if you read Chinese and I don't. I am open-minded - drop some facts in there. Suggestions that fly in the face of the few facts we do have don't help and confuse the issues. If you tell me that the second cousin of a senior member of staff at LEPIN works just round the corner from a mould manufacturer in Germany, then I'm ready to call "foul"; if you tell me he works TLG's own plant in Jiaxing, then I'm not. Instead, I'll start trying to determine if there's any way that could influence the situation - although there are much easier ways of achieving the same thing, and that don't require bribes to traitors.
There are also much bigger questions than whether LEPIN engaged in industrial espionage. They certainly don't need to have done so. They're not dumb, so they have a reasonable idea of where this might go. I'm also fairly sure that they'll have an answer too, which suggests things might get a lot more complicated. They seem to have established a brand awareness in Asia - they'll do something with that. They seem to have established significant production facilities - they'll do something with those, too.
I'm not interested in the "Chinese way", nor do I have any vested interest in, or connection to, it. The Chinese do their thing, their way. Good luck to 'em. However, you can't hope to influence the Chinese, or anybody else, by looking at things from your point of reference - you have to look at it from theirs. Without that, you won't even understand what they're doing, let alone why or how - nor work out how to deal with it.
Decool is still an incorrigible copycat! I stand corrected. :-D
Some points to note:
- Curious to know which will be their arguments for the case. Minifigures? Special copyrighted part designs from past few years? Brand logo similarity? Illegal use of their product stock photos? Copycat of current sets resulting in lost revenue?
- No doubt this announcement actually benefitted Lepin in the short term as previously only diehard fans of Lego know about Lepin and now everyone around the world will be curious to find out more about this unheard of company, why TLG singled out this company, and in the process get to know more about their products. TLG knows there is no way around this so obviously they took a risk to proceed.
- Many commented at the article's post saying TLG will surely lose in a China court, but that is not necessarily so. China had progressed to a stage whereby they're now as competent as any other country in the world in many areas, so it really depends on how strong are the argument points TLG will be bringing to the court. Ideally TLG should be suing Lepin in a European court but Lepin did not distribute their products in EU so they had no case at all.
- There were lots of interesting and valid viewpoints posted here in the past years, somehow I get a feeling that the TLG staffs may be monitoring here for "ideas", so to speak, in their fight against Lepin.
- If TLG wins the court case, I suspect it may not impact the situation much, as Lepin would likely just make the changes and continue to release updated versions based on the court rulings. At most they change to a different company, like all other clone brands in China.
- The court proceedings can drag on for years so likely to drain TLG's resources and may distract/affect their core business, I'm not sure this is a good thing.
This news is so fresh that when I searched on baidu, someone on a Chinese forum linked it to here! :-D
Google says these are the most valuable sets:
- UCS MF (cloned)
- Taj Mahal (announced, soon)
- Grand Carousel (announced, delayed, soon)
- Statue of Liberty
- Eiffel Tower
- Imperial Star Destroyer
- Cafe Corner (cloned)
- Death Star II (skipped)
- Mr Gold (cloned by POGO)
- Market Street (cloned)
Of course, now that TLG has taken action against the makers of Lepin, the game has changed.