Identifying Fake Foreign Brands in China

SHANGHAI - As more and outside suppliers enter Chinas lubricant market, consumers started to see numerous products with foreign names.

Often these products have labels and other marketing materials saying that they are produced by foreign companies, frequently based in Germany, the United Kingdom or the United States, and offered locally by companies claiming to be a Chinese subsidiary or an authorized distributor.

But some of these products are not what they seem, though its not always easy to identify which ones. Xiamen Arthur is based in Xiamen city, Fujian Province, and claims to be the sole authorized distributor in China of engine oils, greases, gear oils and other products produced by Arthur Petroleum UK. Xiamen Arthurs website describes the British company as a Surrey-based multinational company specialized in aerospace special material, chemical additives and petrochemical products with a history dated back to the World War II.

In fact, Arthur Petroleum UK dissolved in 2006, two years after its formation, according to multiple online providers of business records. When questioned by Lube Report Asia, Xiamen Arthur, which was founded in 2005, declined to comment.

It is not only consumers that stand to be duped by such promotions. Chinese lubricant distributors may end up selling products that they genuinely believe were produced overseas. A distributor from Inner Mongolia explained how that can happen at the Inter Lubric exhibition here this month.

Most regional dealers like us know very little English, so we have no way to know if these are real foreign brands, the distributor told Lube Report Asia during a Nov. 10 interview. He identified himself only by his family name, Hao, and asked that his company not be identified. We do business with them because they offer us a good price, and Chinese consumers prefer foreign brands. In Inner Mongolia, he added, local consumers like German and American lube brands.

The numbers may be attractive, but Hao said it can be bad for business if it is found out that the products are not foreign. Sometimes distributors will learn this from knowledgeable customers.

I dont want to wait to be told by our customers that we are selling fake foreign brands, Hao said. Its too embarrassing. I want to sell real foreign brands so I can confidently promote them in the market.

During Inter Lubric, Hao visited the booth of Cam2, the engine oil brand owned by the Denver-based Cam2 Motor Oil Products Company, trying to determine if it was truly an American brand.

There is a fake German brand at my store, he explained. The quality is okay, so so far, so good. However, I plan to slowly replace it with a real foreign brand before people find out. He declined to identify the brand or his supplier.

Sun Guanglin, a Cam2 sales manager based in Shanghai, said distributors know to verify product origin.

We are asked often to prove that we are an American brand, so we have to provide the import certification from the China customs, Sun said, adding that it would be difficult to prove the brands American origin if the products were not fully imported.

Obviously many Chinese dealers know about fake foreign brands, and they don't want to get involved. I think its good for real foreign brands like us, Sun said.