Princes, thieves and make-believe: Pinarello fights for its name

‘Chinarello’ has become the lead character in a new online fantasy world where eager players can select a favourite bicycle hero, dress him with a personalized costume – or leave him in default stealth black – then acquire tools (called “components” in this game) that give their hero increasing mobility as they navigate an increasing array of obstacles enroute to rewards, status and ultimate victory.

 

The game platform is open source. Participants can add levels, pathways, and even create new characters. Adding to the game’s mystique, there is no centralized developer and marketing is entirely organic. Though 18-35 year-old males dominate the playing space, it can be easily picked up at any age. All that is needed is an internet connection, time, and tokens; available everywhere, thanks to a partnership deal with all major banks who offer tokens through their on and offline branches.

It sounds easy, and it is. But not everyone is having fun.

Pinarello S.p.A., the Italian manufacturer of Pinarello frames, is potentially the most visible opponent – and target – of this game: a growing trend towards consumer sourcing of counterfeit bicycle frames, mostly from OEM/ODM factories in the manufacturing-heavy southeast-China provinces of Guangdong and Fujian. The decades-old bicycle brand has recently escalated efforts to protect itself from the explosion of lookalike ‘Prince’ and ‘Dogma’ frames that are being offered through popular sourcing sites such as Aliexpress. The notice on Pinarello’s home page (above) is the latest front-end approach to distance itself from counterfeit products.

As with most famous bicycle brands, Pinarello has been relatively forward about its production origins, though perhaps not to the extent of fellow Italian brand, Colnago, who famously partnered with the Taiwanese ‘A-Team’ in 2005.

Screen grab from Pinarello’s FAQ section

 

‘Made in Italy’ is a powerful hook, with associations of prestige, pioneering spirit, passion, victory and exclusivity. When compelled by market forces to shift production to Taiwan OEM’s, Pinarello faced the same dilemma as others before it. How does one simultaneously project an Italian soul and demonstrate the best qualities of Asia-based manufacturing?

Consumers have grown skeptical to the point of cynical about the origin (still a key value proposition factor) of branded bicycle frames and confused about the multiple supply channels that often exist for the same product. When suppliers neglect to lead communication of product-based process changes – perhaps believing they are either unimportant or commercial in confidence – consumers have pounced on surrogate information, or mis-information, when it inevitably appears online. Over the years, fragmented information forms composite knowledge, often manifesting in robust sentiment across popular cycling enthusiast forums. Threads relating to sourcing ODM frames and fakes are extremely advanced. Participation is amplified by broad and opposing views, highlighting a diverse community behind the discussions. Forums such as roadbikereview.com and weightweenies.starbike.com host an array of related threads.

Naturally, there are contrasting agendas at the fringes. On one side, an underlying theme of “serves you right for farming off production to Asia” exists behind the decision for someone to purchase a frame with obvious design language that, executed well, emulates brand status at a much lower price. At the other end of the spectrum, forum users are taking advantage of modern-day technology/globalization to connect with smaller ODM’s to secure a quality open-mold frameset for their own bicycle build project – no different from importing a kitset car chassis to mount an engine on. In the middle, people are watching, learning, attempting to figure out right from wrong.

As China’s population and per capita income grows, we might assume the demand for counterfeit product will also increase. After all, counterfeits and China have become synonymous – ask any famous Swiss timepiece manufacturer. Or Nike. However, a recent report by McKinsey Insights China (a subsidiary of McKinsey Global Institute) ‘Understanding China’s Growing Love for Luxury’ captured a possible shift in domestic consumer behaviour:

“The percentage of consumers who said they were willing to buy fake jewelry has dropped significantly from 31% in 2008 to 12% this year (2010). Some luxury buyers told us they were sure their friends would spot a counterfeit, a decidedly embarrassing situation. One woman who used her first salary check to reward herself with a luxury handbag told us “it would be meaningless if it was fake.

Half the consumers we spoke with in 2010 said better quality is an important reason to buy luxury goods, up from 38% in 2008. A well-known brand was the second-most important buying consideration, mentioned by 48%. Quality and craftsmanship – which reflect a product’s heritage – are two of the top three consideration factors. And internationally well-known brands have replaced innovative design as one of the top three factors consumers consider when purchasing these goods.”

Foreign brands can only dream the mindset framed in that particular survey of 1,500 consumers (from tier 1, 2, and 3 cities) applied to the entire population today. Production of knock-off products is a long-term problem with no easy solution in sight; which is why premium-positioned brands like Pinarello are desperate to preserve their market share and brand image.

Unfortunately for Pinarello, counterfeiting seems to preference European bicycle brands. This is true for road bikes, but less so for mountain bikes. US brands that entered into Asia-based manufacturing partnerships much earlier than their Italian peers have perhaps been better positioned to “grow into” emerging markets whilst securing market-specific intellectual property rights in order to pre-empt forecasted supply issues. Also, it’s without question that Italian brands in particular possess a heritage that US brands cannot simply create. Re-creating product that satiates consumer desire to engage with that heritage is the profitable domain of counterfeiters.

In spite of Pinarello’s evolving design and resultant fabrication complexities, the brand’s desirability still makes it an obvious target to copy. Perhaps the most recent (2009) production figures from Pinarello reveal a contributing factor in the hallowed Italian brand’s problems. In spite of being globally recognized (some would say revered), it’s production scale is not commensurate with anecdotal demand. Of the 33,000 Pinarello and Opera branded units manufactured in 2009, only 7,000 units were frames. 70% of all units were exported, mostly to markets like USA, Japan, Australia and Spain. Is Pinarello leaving desperate buyers with no alternative but to source copies? Or is it simply a matter of price?

Again, it would be easy to assume consumers in wealthy markets are buying all the authentic product while the less-affluent consumer markets in Asia are fuelling demand for knock-off framesets. Proportionately speaking, there are fewer points of retail sale in emerging markets, due to socio-economics and brand-driven development caution. Ironically though, it appears cycling consumers from some of the world’s most developed countries are amongst the biggest consumers of counterfeit product. After all, even a knock-off ‘Pinarello Prince’ frame sells for upwards of USD450. This is out of reach for the average Chinese, who doesn’t earn that much from one month of labour.

Cycling iQ spoke directly with Pinarello bicycle retailers and distributors across Asia-Pacific to measure how widespread counterfeits might be and to prove or disprove the rumors that Pinarello’s own OEM’s are complicit in their supply. Representatives from Pinarello’s authorized Australian and New Zealand distributors both verified they had seen painted, and unpainted, Pinarello Prince and Dogma copies in their respective markets.

“It’s hard to pinpoint” according to Armstrong Sport, in New Zealand. “They are pretty convincing fakes. However, the headtube profiles are different, and the seatposts are round (on the fake Dogma’s).”

The response from De Grandi Sports in Australia was similar. “We get phone calls from people asking for round seat posts for their Dogma. The Dogma doesn’t have a round seat post. That’s a pretty easy one to spot. We also see frames with no serial numbers.”

A distributor based in Asia, asking to remain anonymous, summarised the purchase triggers and elaborated on the view that Pinarello’s production partners are to blame for leaks of actual unbranded product that may be back-doored.

“I’ve seen (fakes) here. The amount is not a lot as most people here are computer-savvy and know fakes from the real stuff. Most buy for the heck of it, like a fake Rolex just to bash around or to  test the ride quality of these fake Pinarellos. Pinarello S.P.A. is trying their best to combat the factories that produce the fakes. There is a lot of red tape in China. It will take a while before these frames off the internet.”

“I have read on the net that people believe these fakes are coming from OEM guys with excess frames. Trust me, they are not.”

Cycling iQ also contacted four of the factories most widely used for sourcing raw frames – HongFu, DengFu Bikes, Gotobike and Miracle Bike. Representatives from HongFu and Gotobike both stated they did not provide Pinarello copies, whilst communication with DengFu bikes stopped prematurely. Miracle Bike had not responded at time of writing.

Whatever strategy Pinarello takes to squeeze oxygen from their enemies, it will be of extreme interest to brands that are similarly impacted by counterfeit products. It may be purely co-incidental that Pinarello made a trademark application with the Taiwan Intellectual Property Office (TIPO) in April this year, but perhaps it is also a preparatory step towards the elastic and complex IP regulations in China.

Note: Pinarello did not respond to emails, but Cycling iQ is still attempting to make phone contact with a senior representative for comment.

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