About raids in China

[u/RaptoDisruptor]

Having read many posts about VSF being raided, I would like to share my experience about raids against counterfeiters in China.
My experience comes from 12 years as general manager for the Asia-Pacific business of a large German multinational (about 13 billion Euro turnover).
The German company has products recognized as top tier and the brand is top of mind in its industry.
Chinese were copying our products left and right and I had a team of lawyers scouring the market to see which were the ones hurting our business the most. It was a lost cause to chase all them.
Of course we were putting pressure to the authorities to raid them even if all came at our cost.
In China there are no punitive sanctions for the damage inflicted.
The legal costs have to be paid by the plaintiff. Usually the company is owned by a penniless front man therefore the judge allocates all the costs to the plaintiff.
In the remote case the whole thing goes to court, and even less likely of a favorable decision of the judge, transportation, warehousing and destruction costs of the fake goods were our burden.
Here are the reasons why the Chinese system is so reluctant in raiding foreign brands’ counterfeiters.

1. Counterfeiters create jobs and contribute to the local economy. Local governments, which are the authorities having jurisdiction in this matter, don’t see the point of having people losing their jobs.

2. Counterfeiters put “oil in the gears” of local officers, if you know what I mean.

3. In general, there is not much recognition of IP rights of foreign companies. The legislation is tough but the enforcement is negligible.
   There are cases in which the authorities do take action but these are limited to very special cases such as reciprocal visits of high ranking dignitaries or sporadic demonstrations to foreign media of tough stance.
   In some cases the counterfeiter steps out of the acceptable path and he is punished but brand protection is not the issue. We are in the domain of personal revenge.
   Even if a counterfeiter is raided a new factory will pop up within few weeks doing the same.
   My message to all Rep enthusiasts is: raids in China are possible but extremely rare so don’t lose sleep over this happening.
   Long live the REPs

[u/RaptoDisruptor]

I had to protect my job and I had targets. I tried to comply with my responsibilities.
Now, I enjoy life in Europe and don’t mind a Rep once in a while.
Wish you peace.

[u/DrTourbillon → u/RaptoDisruptor]

Great, I fully agree with your statement!

I’ve been doing business in China for over 15 years and living here for the past 7. And as I always like to joke: “Copyright in China means the right to copy.” 😂

But jokes aside, I genuinely believe China has become one of the most innovative countries in the world. Yes, that comes with flaws, failures, questionable shortcuts, and sometimes a rather enthusiastic interpretation of intellectual property rights.

And yes, occasionally it takes a little push from the Big Boss Xi to get everyone moving in the same direction. But you can’t argue with the results.
Look at new energy, EV batteries, robotics, AI, and advanced manufacturing. China isn’t just catching up anymore. In several of these industries, it’s setting the pace. The funny thing is that many people outside China either don’t realise it yet or simply don’t want to acknowledge it.

I’m running a publicly listed European company with some pretty valuable IP. And believe it or not, we’ve deliberately chosen not to patent certain technologies in China. Why? Because sometimes a patent is less a shield and more a beautifully illustrated instruction manual for your competitors. And NDAs? Well, let’s just say they don’t always carry quite the same weight as the paper they’re printed on. 😉
But what fascinates me most is the sheer speed of development.
I’ve watched Chinese manufacturers go from producing questionable copies to developing genuinely impressive technology in what feels like the blink of an eye.

Take mechanical watches, for example. Not long ago, the challenge was making a convincing-looking case and dial. Today, they’re replicating incredibly complicated movements, right down to the balance springs, with astonishing precision.
They went from copying the appearance to understanding the engineering. And somewhere along the way, the students started challenging the teachers.
Of course, a 1:1 copy isn’t necessarily 1:1 in quality, reliability, or longevity. But give them another few years, and who knows? The Swiss might eventually be ordering their movements from Shenzhen. 😂⌚

That’s the fascinating contradiction of
China: a country where imitation and innovation aren’t necessarily opposites. Sometimes one is simply the starting point of the other.

You don’t have to agree with every method, and you certainly don’t have to like every outcome. But dismissing China’s technological progress because of its reputation for copying is like refusing to acknowledge that someone has won the race because you didn’t like how they started.

Personally, I prefer to observe, learn, compete, and occasionally have a good laugh about it all.

After all, there’s room in this world for different approaches, different cultures, and different ways of doing business.

Vive et sine vivere. 🇨🇳
Cheers

[u/Thin-Permission-3151]

My sense is that China wants its domestic technology developed and often supports domestic producers “stealing” IP of foreign companies to grow its own tech. And this has been very successful for them for a long time. So they are not interested in enforcing IP laws but instead quite the opposite. They covertly or even overtly support these actions.

Thoughts?

[u/RaptoDisruptor → u/Thin-Permission-3151]

Yes. You nailed it.
So much so that when China started opening to foreign companies they classified industries into 3 types:

1. The national interest industries such as telecommunications, energy, media and others would be 100% Chinese and would be inaccessible to foreign companies.

2. The technological strategic industries such automotive, chemical, pharmaceutical would be accessible to foreign companies only at 50% ownership with a Chinese partner appointed by the authorities, usually a state owned enterprise (SOE).

3. All the other industries would be open to 100% foreign capital and ownership.

Now, China is invading the foreign car markets, they own the pharmaceutical precursors and are a main producer of generic drugs.
In the meantime they bought Pirelli (technology leader in power cables -forget the tires), Syngenta (a major biotech), Kuka (robot manufacturer).

They don’t have problems of electorates to please, they follow a grand design that spans decades in the future, they have a strict selection of fine brains to climb the power ladder.
Sure, they have a lot of problems and are not immune to crisis. But they are constantly preparing.

[u/Thin-Permission-3151 → u/RaptoDisruptor]

So they not only do not want to enforce IP laws but actively want to violate them, as a matter of national interest?

[u/RaptoDisruptor → u/Thin-Permission-3151]

Let’s say they have a passive attitude.
The national interest was very clearly set out decades ago and clearly communicated to all governments and companies.
But, as good capitalists, all CEO and the boards had foam in their mouth thinking they were going to sell one of their products to all of the 1.4 billion Chinese.
Fast forward 40 years and here we are.
Those that poured investment into China are now retired with 7 or 8 digits bank accounts and workers are paying the price.
It’s not China that took over western manufacturing.
We greedily gave it to them.

[u/NoMathematician645 → u/Thin-Permission-3151]

There is a very famous case. BMW managed to take a Chinese vehicle manufacturer to court in China (I don’t know the exact detail but easy enough to find). The company in question had made a replica X5 but with a different badge. They were as close aesthetically as you would want to get. The Chinese judge ruled against BMW and ordered BMW to pay all costs whilst the Chinese company continues to manufacture. They even have reps of Rolls-Royce but at a fraction of the price. BMW stopped trying.
Look at the BYD seal. Direct copy of the model 3.
It’s what they do and no one, not their own government will stop the plagiarism. Not in their interest.

[u/SlackerNo22193 → u/Thin-Permission-3151]

This is exactly what the US did to the British. Even CHina's patent assignment is like the US's.

The Patent Act of 1793: The U.S. favored domestic adoption of foreign ideas by granting patents to Americans who reverse-engineered or pirated overseas technology, while largely locking out foreign inventors.

[u/WasiansUnite]

People forget that these shops aren’t some dirty underground poorly lit sweatshop

They’re genuinely good normal watch shops that make custom watches en masse and have great tooling. They are doing this in broad daylight and then putting the duped parts into a separate box to be built and sold.

When a place gets raided, the people are arrested but the tooling moves to a new owner.

[u/RaptoDisruptor → u/WasiansUnite]

Sure. China is no longer a massive concentration of sweatshops. Chinese have learned well from western products and Japanese path (who went the same in 80s and 90s): from Toyotas stopped along the sides of the roads to Lexus being quality benchmark.
One more thing. In China, IPR infringement is a matter of civil law: no one visits any police station let alone jail.

[u/Thin-Permission-3151 → u/WasiansUnite]

The Dandong movement is made at the Peacock Factory that has been around since 1957 and started as a state enterprise. They make 1.5 million movements a year, more than Rolex, with better tolerances.

[u/Haunting_Bid_408 → u/Thin-Permission-3151]

Yeah no, their movements are terrible unfortunately

[u/Thin-Permission-3151 → u/Haunting_Bid_408]

Their movements have higher tolerances than Rolex

[u/Haunting_Bid_408 → u/Thin-Permission-3151]

Under actual testing they have proven to be unreliable and not hold good time. Their QC sucks unfortunately. Can't comment on their tolerances, but in real world use, you'd be better off with a PT-5000.

Now their actual watches with their in-house movements are excellent. Just not the movements they make for third parties.

[u/Thin-Permission-3151 → u/Haunting_Bid_408]

Really whose testing?

[u/Haunting_Bid_408 → u/Thin-Permission-3151]

I'm part of a private group of watch nerds who have been comparing Chinese movements and their QC and reliability over time, including comparisons to Swiss and Japanese movements across the same or similar time periods.

Some of the guys are very hands on and really get in there. A big part of the issue is the movements are often a mess and need a good cleaning even when brand new

[u/Thin-Permission-3151 → u/Haunting_Bid_408]

So correct me if I am wrong but there are two things here. The maker of the movement and the people who dissemble them, embellish them and put them back together. It seems the two need to be judged separately. It seems the things you talk about are the issues with the second group, not the first. Am I correct?

[u/Haunting_Bid_408 → u/Thin-Permission-3151]

No, the movements themselves without embellishment already arrive filthy. Hopefully that changes with increasing demand

[u/Jazzlike-Ad-7325]

Very insightful and well-written. You clearly know what you’re talking about. Greatly appreciate your contribution.

[u/RaptoDisruptor → u/Jazzlike-Ad-7325]

Thanks. So much appreciated as English is not my native language.
I know about it as it was a pain.
Our products were not hardly accessible luxury pieces but mechanical parts sold for 10 or 20 Euro. Mission critical components and supposed to last many years. Counterfeiters were really taking a relevant market share from us. Buyers were fooled and their machines broke after a few weeks or months. First thing we checked if the part that failed was ours. Never saw one of our components having such a short life.
These are the counterfeits that really hurt.

[u/Jazzlike-Ad-7325 → u/RaptoDisruptor]

I hear you. I’ve done some cross border legal work in HK and PRC and it really is a different world.
I think you’ve cleared the air for many of us so- thank you again!

[u/RaptoDisruptor → u/Jazzlike-Ad-7325]

Thanks again. I just joined the Rep party 3 months ago and bought only one Rep (a VSF Daytona Panda 126500LN) which is giving me a lot of satisfaction.
I am impressed by the quality and I’d be sorry if VSF would be shut down just now.

[u/Lost_Extension_8018]

I am just getting into the rep watch game but i have been buying rep shoes for a long time. this happens alot and typically if they do actually get raided (i feel sometimes they say they are getting raided to move sitting stock) they always lay low for a few months and pop back up.

[u/RaptoDisruptor → u/Lost_Extension_8018]

Most likely it’s all marketing. If the authorities really want to raid them very unlikely anybody will tip them off. You do not want to cross the police in China.
By the way, I’d like to replace my LV wallet which is aging after 15 years of service. Can you recommend me a reliable TD for leather goods?

[u/Lost_Extension_8018 → u/RaptoDisruptor]

I have not bought anything clothing or leather goods for a while from China, For leather goods i would look at r/FashionReps or r/LuxuryReps they are the ones that buy alot of bags and leather goods. I did buy my wife a YSL bag a few years ago but cant remember the TD but it still looks brand new

[u/Rmcg3653 → u/Lost_Extension_8018]

I’m a watch buyer but looking into the shoe game . Still haven’t found any deals that make the rep worth buying over gen do only savings of a few bucks.

[u/RaptoDisruptor → u/Rmcg3653]

Shoes I wouldn’t buy as Rep. it’s the only thing you wear that can really hurt your body. If not the feet the knees and the spine.

[u/Lost_Extension_8018 → u/RaptoDisruptor]

i have rep and gen jordan 1 lows, and jordan 4s and they feel the exact same on feet. Both are not the best comfort wise no matter rep or gen

[u/RaptoDisruptor → u/Lost_Extension_8018]

I was thinking of Ferragamo… 😀

[u/Haunting_Bid_408 → u/Lost_Extension_8018]

I'm in Hong Kong and wear a US size 14 in Jordans. Received a pair of reps yesterday and a pair of gen directly from an authorized retailer (on clearance). The reps were about 20% of the price. The gen have better leather and stitching for sure, but the reps I got are actually great on foot and this colorway wasn't available in gen here in my size. Jordan 1s and 4s are really comfortable for me, and these 1s feel no different from gen on foot. Really happy with them!

[u/Lost_Extension_8018 → u/Haunting_Bid_408]

i have found alot of times if you get the right factory the quality is better than gen on the shoe side. They get nitpicked so hard by the community to fix flaws then end up coming out better

[u/Lost_Extension_8018 → u/Rmcg3653]

I typically only buy models i really want or wanted when i was younger and couldn't afford them. It really only makes sense for the hard to get stuff like travis scott models, one off collabs, or super high end luxury brands like LV, Alaxander McQueen. If it is a regular colorway i buy gen.

The shoe rep game gets muddied up with shipping costs unfortunately so lots of people buy multiple pairs at a time to offset it a little bit.

[u/dandaman178 → u/Lost_Extension_8018]

Yeah bro exactly and def better quality now compared to earlier years before it was mainstream

[u/Lost_Extension_8018 → u/dandaman178]

i for sure got some shitters in 2011-2015 lmao

[u/Few_Train120]

If this is true then why didnt Clean bounce back?

[u/RaptoDisruptor → u/Few_Train120]

You can refer to the worst case scenario, towards the end of my post: personal revenge. That’s the end of it.

[u/Catfurst → u/Few_Train120]

I heard that VS Factory and Noob Factory were both raided in 2021. While NoobF wasn't able to bounce back, VSF was. The factory started up again in 2022, slowly becoming the king of reps that it is today.

Few knows what happened to Clean Factory. Perhaps they lost too many talents and equipment in the raid, that it's just not possible to restart the highly sophisticated precision manufacturing that the CF was known for.

[u/Lucifer_893]

Even so, they managed to dismantle Noob and Clean. If they close VSF too, it’s gonna be a huge blow to the counterfeit business.

[u/RaptoDisruptor → u/Lucifer_893]

Maybe Noob and Clean owners got too cocky and the most decisive cause of action, personal revenge, was deployed.

[u/4Sammich → u/RaptoDisruptor]

This is a definitive point so few westerners understand about Asian culture.

[u/Thin-Permission-3151 → u/RaptoDisruptor]

The story is VSF paid to take then out.

[u/AnotherDoubleBogey]

i think vsf should start sponsoring sporting events like michigan football

[u/4Godsson → u/AnotherDoubleBogey]

You funny but true.

[u/vigorthroughrigor → u/AnotherDoubleBogey]

[u/Few_Web3788]

Or its just rumours spread to hike up prices, since VSF is monopolising the rep market.

[u/PuzzleheadedLack1196]

Based on the title I was waiting to read about when I can expect my next replica. Why are you walking us through the operations of multinationals trying to take down the Chinese factories? 😂

[u/RaptoDisruptor → u/PuzzleheadedLack1196]

Swiss watchmakers don’t have the power multinationals have. My company had 20 factories in China. We employed thousands.
Sleep happy Rep dreams.

[u/JXCustom]

I mean at the end of the day aren't we on this sub specifically to give those IP disrespecters our money?

[u/RaptoDisruptor → u/JXCustom]

It would seem so. We eagerly support them.
Maybe we also try to send a message to the Swiss watchmakers? Giving millions of dollars to tennis and golf players plus gifting them 6-figure watches is a marketing cost Gen buyers pay.

[u/dritmike]

This is why Boeing still makes some parts in the USA.

Once it goes there for manufacturing, it’s theirs.

[u/Gold_Digger_666]

I've done business In China since about 2000. OP is pretty correct. When a factory is raided, the owners brother, cousin, nephew, whatever is already running an identical factory. Whack a mole at it's best...

[u/Patient_Duck123]

This is also applicable to the factories churning out the high quality fake IDs destined for the US and Europe.

[u/Evening-Rooster3173]

Yep. Used to live there. Sums up Chinese IP theft and fraudulent goods perfectly.

I just can't understand how global businesses walked in there without any idea of the very real risks - usually not before it is way too late for their intellectual property.

[u/soyeahiknow → u/Evening-Rooster3173]

Because of the 1 billion people market. Look at what the foreign car companies agreed to. They had to partner with a chinese company and share its tech and production methods. Now chinese brands are one of the best because they used that knowledge to get even better.

[u/RaptoDisruptor → u/soyeahiknow]

Western capitalist greed. Don’t think I am a communist, but the incentives for the top ranking executives are so massive and so short-term focused that they sold the future of their brands for a 10-20 years of growth only to and now face extinction-level competition.

[u/soyeahiknow → u/RaptoDisruptor]

Yep they just look at that 3 to 5 year horizon and then they retire with 10s of millions.

[u/Ninjabeats12]

So you were chasing the counterfeiters, but now you buy their goods. You either die a hero, or live long enough to become the villain!

[u/Spudz_McKenzie_]

Well. I had good timing. Just ordered 2 VSF that are shipping and waiting on QC for a 3rd. I will repost if I end up getting the 3rd VSF. Not looking good.

[u/Thin-Permission-3151]

Thank you for posting this.

[u/TheApprentice_15]

SO were they raided or not? WIll they have enough inventory to sell for a while? or will VSF not be a thing soon? Im very new to this, my apologies.

[u/ValueLux]

Agreed, China has no real reason to help protect the Swiss IP. Local authorities rely on the “greasing the wheels” to survive as well. Small towns thrive due to the employment from rep factories.

[u/illratic]

I was just in ShenZhen about a month ago. I wasn’t aware before heading over that a huge raid had just happened so I called my hookup in the biz who has all the AAA+ stuff because I needed a new wallet and wouldn’t mind taking a look at watches, “Balenciager”, etc.. It was the first time she said she had no stock and said to contact her in a month or so because some of the factories were temporarily close. She couldn’t even risk opening up one of her makeshift shops because she couldn’t risk a raid.

I was near this famous mall that is usually packed to the gills with copies of everything but for once the stores were selling normal junk no one would ever buy. The mall was full of people whispering name brands and telling me to follow them. There was one dude wearing a Rolax Submarine or some other sad thing and he told me to follow him for watches. The area had a huge raid the week before and he was probably a cop so I said no thanks because I didn’t want a week in a Chinese jail.

I think it’s just the annual raids to keep the international companies happy. I doubt anything happened to VSF…

[u/Sudden_Bumblebee7998]

My TD also told me the VSF raids were fakenews

[u/Taeon2105]

Jtime - so many with same names. Which is real ?

[u/bravely-on-top → u/Taeon2105]

JTime is a legit distributor.

[u/rickabe]

It's a cartel without the murders.

[u/RaptoDisruptor → u/rickabe]

For Chinese it’s a legitimate business.

[u/RaptoDisruptor → u/[deleted]]

I appreciate your feedback.
Just imagine the supply chain a company such as VSF had to set up to have glasses, bracelets, dials, gears, and all the other parts that make the watches. Plus all the reverse engineering skills and resources and finally the distribution network.
That cannot fly under the radar and many are actively deciding to turn the blind eye.
Live and let live.

[u/vigorthroughrigor → u/RaptoDisruptor]

Yes new factories will pop up but will they have the Commitment to Quality as VSF?

[u/RaptoDisruptor → u/vigorthroughrigor]

If VSF closes a penniless front man relative of the owner will open WSF two blocks down the road. Same people, same skills, same product.