Business – Anna’s Out of Town News

Buying Fake in China

I lost a make-up brush while moving. It was a generic cheap one I used with my highlighter. I got it as a gift in a set many years ago, and it was most likely made in China. Since I was in China, I thought it would be easy to find a replacement.

I don’t exactly put much shop in shopping for make-up brushes. In Russia, I would have gone to some make-up stores and got one; they are ubiquitous, really. In the US, I would have probably ordered one online, since I don’t have time to go shopping, and New Haven doesn’t have that many stores anyway. Either way, I would have gotten a brush that was made in China an forgotten about it until I lost it and had to buy a new one.

But it’s not that simple in China.

Almost every country has a signature shopping experience for its visitors. Tourists emerge from Thailand wrapped in sarongs and wearing Thai pants; it’s vodka and nesting dolls in Russia; lederhosen and teddy bears in Germany. In China, it’s fake stuff.

I grew up being told that pirated music and software and counterfeit goods are bad. So I stay away from fake Louis Vuitton and get my music off iTunes. That’s reasonably easy to do living in the states where pursuing a fake LV bag actually requires some effort (I came across an actual guide of how to go about getting one in NYC (http://www.nytix.com/NewYorkCity/articles/handbags.html) and my set-up iTunes account allows me to buy music with one click and my job lets me buy it without worrying about the cost.

But the problem with shopping in China is that it’s often fake or nothing.

So back to my make-up brush story. I went to a Sephora looking for one, but they did not have the kind I wanted (wrong size and shape; yes, I am picky about that). Other chains like Watsons didn’t have one either. At that point, it got ridiculous to be spending so much time to be looking for one small make-up tool, so I decided to go to some local store. I could see locals wearing brush, so proper brushes must exist in China!

At a large department store, there was an entire floor dedicated to make-up and beauty-related goods. And then I spotted what I wanted. It was perfect –small, light, convenient, and sized just right. But it had huge MAC logo on it — clearly and obviously fake. MAC doesn’t make the same kind of brush; MAC’s brushes are priced at 30+USD; that one was 2.5USD. If it had ‘Chanel’ or even ‘Coca-Cola’ on it, I would have wanted it anyway.

And so I bought it. And I somehow feel guilty about it. All those year of seeing ads against counterfeit goods and reading about how buying counterfeit destroys big companies have instilled guilt in me (good news for those PR agencies designing them, I guess). I like MAC, and have no intention of hurting their business: they don’t test on animals and even run a program that donates money to AIDS-related causes. I even volunteered for them several years ago. But I did not buy it for the logo — I would have wanted it anyway. See, when you buy a fake Coach bag, you usually do it for that design, right? In this case, I did not care about the logo; an it’s not like I would have bought a real one from MAC, because I don’t like their brushes. So they did not lose profit.

There are legal and economical implications of buying fake, but I only want to talk about the ethical ones this time.

Now, can you say it was unethical of me to buy that brush?

On the one hand, I did not have many alternatives. I seriously could not fin anything else anywhere. I could have bought one from eBay and had it shipped here, which would have wasted money and damaged the environment; I could have asked a friend to bring it over from the US, which is ridiculous, really.

On the other hand, I could have avoided buying one altogether and lived without using that particular make-up product (let’s face it, it’s not essential to my well-being). But I guess I am pretty spoiled as a consumer, because I am more or less used to instant gratification — you want the brush, you take out your debit card and buy it, whether on- or offline. And I could get anything else anywhere. And this consumer mentality is cultivated by the same multinational companies that complain about losing profit to fake goods. In MAC’s case, it’s Estee Lauder, who also owns the company that made the highlighter I wanted the brush for. I would have not bought the actual brush from MAC, since none is available, so they did not lose any profit. Since I will be using the brush to put on the make-up and will run out by the time I have to go back, I will buy more of the product, which will end up bringing Estee Lauder more money. So we all win — Estee Lauder will get better profit, I will have positive consumer experience, and some Chinese factory workers will not lose their jobs (provided they work at a regular factory and not a sweatshop).

And I assuage my guilt by readily admitting it’s fake when asked — this makes me feel like I did not by it because of the three letters on its handle.

The story of my make-up brush is not that exciting, really. But that one little brush represent an entire industry of fake goods — which is estimated to take up over 7% of all world trade! All these fake brushes so widely represented on eBay that there are even guides on how to spot them (

http://reviews.ebay.com/MAC-BRUSHES-Guide-to-Fake-vs-Authentic-MAC-brushes_W0QQugidZ10000000002525878

(http://proquest.umi.com/pqdlink?Ver=1&Exp=08-24-2014&FMT=7&DID=1095869571&RQT=309&cfc=1)

I will write about legal and economic issues accompanying counterfeit goods later, since I am still researching it. But you know something is wrong with a country where the only mundane household item of a decent quality you can find is a fake.

I lost a make-up brush while moving. It was a generic cheap one I used with my highlighter: I got it as a gift in a set many years ago, and it was most likely made in China. Since I was in China, I thought it would be easy to find a replacement.

I don’t exactly put much effort in shopping for make-up brushes. In Russia, I would have gone to some make-up stores and got one; they are ubiquitous, really. In the US, I would have probably ordered one online, since I don’t have time to go shopping, and New Haven doesn’t have that many stores anyway. Either way, I would have gotten a brush that was made in China and forgotten about it until I lost it and had to buy a new one.

But it’s not that simple in China.

I grew up being told that pirated music and software and counterfeit goods are bad. So I stay away from fake Louis Vuitton and get my music off iTunes. That’s reasonably easy to do living in the states where pursuing a fake LV bag actually requires some effort (I came across an actual guide on how to go about getting one in NYC!) and my iTunes account allows me to buy music with one click and the fact I have a job lets me buy it without worrying about the small cost.

But the problem with shopping in China is that it’s often fake or nothing.

And so I bought it. But I feel guilty about it. All those year of seeing ads against counterfeit goods and reading about how buying counterfeit destroys big companies have instilled guilt in me (good news for those PR agencies designing them, I guess). I like MAC, and have no intention of hurting their business: they don’t test on animals and even run a program that donates money to AIDS-related causes. I even volunteered for them several years ago. But I did not buy it for the logo — I would have wanted it anyway. See, when you buy a fake Coach bag, you usually do it for that design, right? In this case, I did not care about the logo; an it’s not like I would have bought a real one from MAC, because I don’t like their brushes. So they did not lose any profits.

There are legal and economic implications of buying fake, but I only want to talk about the ethical ones this time.

Now, can you say it was unethical of me to buy that brush?

On the one hand, I did not have many alternatives. I seriously could not find anything else anywhere. I could have bought one from eBay and had it shipped here, which would have wasted money and damaged the environment; I could have asked a friend to bring it over from the US, which is ridiculous, really.

On the other hand, I could have avoided buying one altogether and lived without using that particular make-up product (let’s face it, it’s not essential to my well-being). But I guess I am pretty spoiled as a consumer, because I am more or less used to instant gratification — you want the brush, you take out your debit card and buy it, whether on- or offline. This consumer mentality is cultivated by the same multinational companies that complain about losing profit to fake goods; in MAC’s case, it’s Estee Lauder, who also owns the company that made the highlighter I wanted the brush for. I would have not bought the actual brush from MAC, since none is available, so they did not lose any profit. Since I will be using the brush to put on the make-up and will run out by the time I have to go back, I will buy more of the product, which will end up bringing Estee Lauder more money. So we all win — Estee Lauder will get better profit, I will have positive consumer experience, and some Chinese factory workers will not lose their jobs (provided they work at a regular factory and not a sweatshop).

And I assuage my guilt by readily admitting it’s fake when asked — this makes me feel like I did not by it because of the three letters on its handle.

The story of my make-up brush is not that exciting, really. But that one little brush represent an entire industry of fake goods — which is estimated to take up over 7% of all world trade! All these fake brushes are now so widely represented on eBay that there are even guides on how to spot them.

Lost in Translation: Putin v. Michael Dell

Nikita Khrushchev was infamous for driving his interpreters crazy with impromptu emotional Russian idioms that were impossible to translate. At least his interpreters had an excuse: they had to study English behind the iron curtain, without real practice with native speakers. These days there are so many opportunities for language study and practice that aspiring high-level political simultaneous translators should make use of them. It looks like that would be too logical for Russia.

A few Putin-related things happened at Davos: his surprisingly amicable opening speech (very different from the infamous Munich one) and what all the American/Western newspapers gladly labeled a “huge fight” with Michael Dell.

Well, it’s time to practice your Russian, comrades.

Dell asks the very obviously annoyed Putin: “How can we as an IT sector help you broaden the economy as you move out of the crisis and take advantage of that broad scientific talent you have?”

I am not defending Putin, but if I were a leading woman of the powerful nation who could easily leave Europe freezing and attack/defend myself from a neighboring country, I would be annoyed, too, it a chairperson of the computer company not well-known in my country offered me what sounded like his help.

(I am aware that Dell is the second-largest computer maker in the world. I also believe that the IT has a huge potential to broaden any country’s economy. Technology in general has a great misunderestimated potential in politics, economics etc. Russia also needs some IT improvements. I also don’t know what kind of translation Putin heard from his interpreter, but — see the explanation below — presumably not an excellent one. BUT for Michael Dell to ask a question like that to a leader of the country where any big company is viewed as potential government property has a high explosive potential.)

The simultaneous translation has Putin say this: “We don’t need help. We are not invalids… We don’t have a limited mental capacity.”

He actually said this: “You know, the trick is that you don’t need to help us. We are not disabled. Those who really need help are the poor, one needs to help people who help limited capabilities, one needs to help the retired, one needs to help the developing countries…”

The transcript is published here. For the Russian speakers, here is the same thing in Russian:

“Вы знаете – фокус заключается в том, что нам не нужно помогать. Мы не инвалиды. Реально нужно помогать бедным, нужно помогать людям с ограниченными возможностями, нужно помогать пенсионерам, нужно помогать развивающимся странам…”

This YouTube video has it starting at 1:24. The Russian that is heard in the background sounds like precisely what was published.

The main message of his response was that Russia needs not help, but a full-scale partnership. I believe that I heard from many a Yale professor that one of the main reasons of Russia’s aggressive behavior is that for too many post-Soviet years it was looked down at. I agree. Russia needs her respect. And better translators, apparently.

The Lipstick Effect: Russia, the Beauty Industry, and the Financial Crisis

In the USSR, industrial products were prioritized over consumer goods. While industry produced many tanks and guns and much heavy machinery, women often struggled to find decent make-up or clothing. Eighteen years after the communist behemoth collapsed, guerrillas worldwide employ leftover AK-47’s, post-Soviet states sell leftover Soviet tanks to African nations, and the levels of make-up consumption are higher than in many historically capitalist countries. Make-up is readily available now, and many middle-aged women rarely reminisce about the times when they literally used to spend one quarter of their salaries on black-market French mascara.

It is now the time of the year when it becomes especially obvious how far Russia has come in terms of consumerism. Around New Year’s, Russia’s consumerist equivalent of Christmas, stores are abuzz with customers looking for gifts for their near and dear. With online shopping still undeveloped, the number of customers in the stores is a good indicator of the current economic situation. The unemployment rate has skyrocketed, petrodollar flow has decreased, stocks are down, grocery prices went up, and the ruble is being slowly devalued. Yet, the atmosphere is not quite as morbid as I expected. Most stores have not resorted to the unprecedented sales of the US, although many of them have experienced a reduced flow of customers. While the ones selling furniture, expensive clothing, and electronics struggle to stay afloat, the ones offering make-up and sometimes jewelry are — surprisingly — experiencing a wave of consumerism.

In the somewhat pretentious chain make-up store to which I went in hopes of checking off some items of my gift lists, the dreaded krizis was seemingly ignored. The intrepid crowds were joyfully choosing between Chanel, Dior, and Givenchy. But the displays with more modestly priced brands were even more crowded. The customers were scouting the store for the yellow sales labels, but once they identified them, they often bought multiples of the good. At the register, many were flashing the “gold” discount card, which one gets after spending an equivalent of $340 at the store (may I remind you that the average monthly salary in Russia in 2008 is reported to be around $700 (in the pre-crisis exchange rate)?.

That sight reminded me of the article I recently read that discussed the “lipstick effect” apparent in Russia right now (here’s a link for the Russian speakers). In short, the “lipstick effect” is an increase in the demand for perfume and make-up during the times of financial instability. Since people can’t afford much, they resort to buying fun affordable goods such as a new shiny, candy-flavored lipgloss. This theory does appear to be very true right now. Some friends of mine who would have bought more expensive gifts before opted to get perfumes for their male friends or make-up for their females friends instead. Men’s perfumes have been flying off the shelves, a buyer acquaintance of mine confessed. They are replacing the pricier cashmere sweaters, iPods, or cell phones, traditional New Year’s gifts for husbands, boyfriends, fathers, and sons.

Further research suggests the lipstick effect is felt worldwide: from the US to India to New Zealand, “small luxuries” are substituting “extravagant purchases.” Consumerism is an inherent part of the 21st century, and it is quite understandable that people would go for cheaper goods on which to spend their disposable income when the times are tough. As the name suggests, these effect is primarily facilitated by women. And could you blame them for that? In the times of unemployment and the gloomy Russian winter, inexpensive bright lipstick may be the only available kind of retail therapy.

Although I couldn’t find any quantitative research on the lipstick effect in Russia, I would expect it to be even stronger than in other developed countries. First, there is an entire social strata — young, single, well-educated, middle-class women — who gladly spend their money at the make-up counter. Many of them make enough money to have some disposable income left after paying their bills. But it is not enough to buy an apartment or to take out a mortgage: the salaries are still low, and property prices some of the highest in the world (although the property bubble has been bursting recently). There is not much of an investment culture: years of communism and the volatile post-communist market did not exactly help develop one. Saving for retirement is still a foreign concept to many. So these women resort to renting and spending the rest of the money on make-up, hair cuts, pedicures, and salon anticellulite services.

Then, of course, there is the mentality: the “if you’ve got it, flaunt it” attitude is still de rigueur for many. I know plenty of women who would rather buy a mink coat and be on the potatoes-only diet for the next year or two than buy a regular coat and good food . This ostentatious approach causes producers of luxury good all over to swear by the Russian consumers. Those not rich enough to afford haute couture go for the hot finds of the numerous glossy magazines instead: the new mascara brush, the new season nail polish, the new miraculous anti-wrinkle skin cream. Considering the ridiculously low men to women ratio and a common belief that a woman has to a) get married to be successful; b) wear a lot of make up and be always perfectly groomed to catch a man — you get a perfect beauty industry consumer. There are more beauty salons in place in an average Russian provincial town than I have ever seen anywhere. Just a few months ago, everything was overpriced, but women were happy to pay. I remember running out of lipgloss and finding it to be three times as much in Moscow as I paid in NYC. A friend of a friend reportedly used to make a living by taking Russian upper middle-class women to Berlin, where they would stay at nice hotels, eat at fancy restaurants, and shop excessively. With plane tickets and visa costs, they still spent way less than they would have if they bought the same things in Russia.

Now that incomes are down, purse strings are tightened. The sun has set on expensive salon treatments. The beauty parlors, especially the more expensive ones, attract fewer customers, but women are not about to stop getting highlights. A friendly shop assistant reported a drastic increase in the demand for their home hair-dye kits. Likewise, women are not about to stop exfoliating, moisturizing, and de-wrinkling. Some internet forums featured women admitting abandoning the more expensive foreign skin care lines and resorting to the reasonably-priced Russian and Belorussian ones instead (which is generally deemed “ok to do, if you don’t admit it publicly and still have a compact and lipstick by a fancy brand to use in public”).

I happen to like a certain hair conditioner that is made in Belarus. Every time I go to Russia, I attempt to buy several bottles — it does wonders for my hair, it’s very cheap, and it’s patriotic (Russia and Belarus are supposedly one state, no?). It is very popular, but I usually have no problems locating it. This time around, it was nowhere to be found. Previous L’Oreal and Schwarzkopf customers were now making an extra effort to find something cheaper and at least of the same quality, and that conditioner happened to be their best bet. Remember Chanel’s Black Satin hysteria two years back? This is actually worse: instead of the civilized waiting lists at Bloomingdale’s, women are said to bribe shop assistants to keep these conditioners for them when they next become available.

If I had several million dollars to spare, I would be very happy to invest in buying up a skin care factory — preferably in Belarus, for the workforce is cheaper there — and to hire chemists, package designers and advertising experts, pay for a celebratory article in some glossy magazine, and promote my products as de luxe — there will be a high earning potential (and workplaces, too). Do you want to know why I think that? Here is a story:

A sales assistant at that make-up store helped me pick a few gifts, and I commented on the limited selection of the Chanel nail polishes, given that the new line named after Russia just came out. Oh, she was very worried about it, she said. In fact, she wanted it for herself so badly that she had booked train tickets to Moscow to go to the headliner Chanel store, where said nail polished are still available. The dark red version was her favorite, and she was looking forward to finally being able to wear it.

I later found out that a sales assistant in that shop makes around $400 a month. The cheapest return trip to Moscow would cost around $60; that nail polish retails for $38 in the US, and it probably costs more in Russia. It looks like Russian women are still ready to drop a quarter of their salary on the nail polish. Forget Gazprom. With the oil prices plummeting, make-up may be the way to go.

Experiencing Russia at Its Fullest: Perfume that Smells Like Vodka (And Looks Like Vodka)

Do you love vodka so much that that perpetual smell from drinking just never goes away? Well, now you can intensify it by buying a perfume that is shaped like vodka, smells like vodka, and tastes like vodka.

I was passing by a regular cheap make-up/fake perfume stores recently and saw this:

The usual array of knock-off “Trussardi” and “Kenzo” perfumes. But wait, what is there on the right? Looks like vodka bottles to me. Let’s take a closer look:

“Moskovskaya” (a common vodka brand here) — “Paris France”; the label looks very much like a regular bottle of “Moskovskaya.” (if i see one at a store, I will post a photograph here for comparison purposes). I wonder how the owners of the Moskovskaya trademark would react to it? I also wonder how the makers of fine French parfumerie feel about it? The perfume not only looks like a bottle of vodka, but it also smells like vodka (and, as the shop assistant assured me, it tastes like vodka! Maybe it is vodka??? ) And not only “Moskovskaya” is a fine specimen of French perfume industry, it’s also “Exclusive”! Not satisfied with its exclusivity? Representing another choice du jour: “Pshenichnaya Paris.” Fine print at the bottom says “Made in France.”

Both fine beverages…perfumes will cost you 160 rubles — $6.8. Not bad for a fine perfume, huh?

Russian Female Enterpreneurs — and Another Blog For Which I Will Be Writing

Happy to announce I will from now on be writing for a very nice blog about Russian: SiberianLight. Those of you russophiles out there, check it out. My article is about a very unusual way women in Russian start their own businesses and can be found here.

How Russian women are running their own online businesses that make fashion affordable – and make a profit.