What the Counterfeit Starbucks Coffee Case Reveals About Brand Power

A Chinese court ordered Shuangshan Food (Xiamen) Co., Ltd. to pay 21.72 million yuan in punitive damages for selling counterfeit Starbucks instant coffee. The Wuxi Intermediate People's Court issued the 2021 ruling after investigators found the company had supplied more than 50 merchants across 18 provinces, with sales exceeding 7 million yuan, despite knowing the goods were fake.

The case began in December 2018, when Wuxi market regulators received a public report about fake Starbucks products on the market. It highlights both the reach of trademark infringement and the shifting coffee landscape in China, where domestic chains such as Luckin and MANNER compete on price and taste while Starbucks leans on drinks like the iced caffe mocha and store atmosphere to keep customers loyal.

Coffee consumption is becoming increasingly widespread, and brand infringement incidents have risen accordingly. In 2018, the Wuxi market regulation authorities received a report and discovered counterfeit "Starbucks" instant coffee products circulating on the market. An investigation confirmed that they were sold by Shuangshan Food (Xiamen) Co., Ltd. Although the company knew the products were fake, it still supplied more than 50 merchants across 18 provinces nationwide, with the amount involved exceeding 7 million yuan. In 2021, the Wuxi Intermediate People's Court ruled in the first instance that Shuangshan Company must publicly apologize and pay punitive damages of 21.72 million yuan. This case not only demonstrates the strength of the law in protecting intellectual property, but also prompts reflection on the development of domestic coffee brands. At the same time, Chinese brands such as Luckin and MANNER are winning consumers over with better value for money and taste, while Starbucks relies more on store atmosphere to maintain its appeal. This article reviews the details of the case and explores the changing landscape of the coffee market.

Today, coffee has entered the daily lives of many people. Cafes are opening more and more on street corners and in alleys, and the number of coffee brands on the market is increasing year by year. Some people prefer freshly ground coffee, some are fond of drip bags, and others are accustomed to instant products, so the choices can truly be dazzling. Starbucks has a large number of loyal fans in mainland China, but this highly sought-after brand has also encountered troubling infringement incidents.

As early as December 2018, the local market supervision and administration department in Wuxi received a report from the public claiming that counterfeit "Starbucks" coffee products had appeared on the market. After investigation and verification, this counterfeit product was indeed sold externally by Shuangshan Food (Xiamen) Co., Ltd.

Even though the company clearly knew the products were not genuine, it still chose to conceal the truth and pass off fakes as real, selling instant coffee bearing the "Starbucks" trademark to 18 provinces nationwide, involving more than 50 merchants, with sales exceeding 7 million yuan. This shows that the number of consumers who were deceived was quite large.

In 2021, the Wuxi Intermediate People's Court issued a first-instance judgment in this civil public interest litigation, requiring Shuangshan Company to publicly apologize to the public through the media and pay punitive damages of 21.72 million yuan. The ruling of triple punitive damages made many people say it was satisfying.

Similar counterfeit incidents are common, and the trick of impostors pretending to be the real thing always leaves people not knowing whether to laugh or cry. You want to drink Sprite but buy "Leibi"; you want to use Diao brand washing powder but end up with "Zhuzhu" brand. Such examples are everywhere.

And this company, fined more than 20 million yuan, did not even bother to change the packaging and directly sold its products under the "Starbucks" banner. If consumers did not look carefully at the outer packaging, they might not have noticed whether the Starbucks coffee in their hands was real or fake.

The editor has posted the product images so everyone can join in spotting the differences and see what distinguishes the two. Sharp-eyed friends may spot at a glance that something is off with the package on the left—the coffee cup image below looks unnatural—but how many people would seriously check the text on it? The image and trademark look similar, but the packaging and colors give off a cheap feeling. The instant coffee on the left carries that cheap feeling through to the end, with a large "CAFFEE" printed prominently on the packaging. If that is not taking advantage of people who cannot read English, what is it?

Fortunately, more domestic brands have long emerged in China's coffee market. Brands like Luckin Coffee even listed on a U.S. stock exchange. Although it was once delisted due to financial problems, it later turned losses into profits and there were even reports that it would return to U.S. stocks.

Starbucks is extremely well known globally, and there is no doubt about the consistency of its products, but in the contest of price and taste, it has been overtaken by China's domestic specialty coffee brands. For the same cup of latte, MANNER COFFEE is more affordable and tastes better. Starbucks' main selling point in the Chinese market lies more in its store environment.

Starbucks, known for its environment, now plans to open more diverse offline stores in mainland China. According to reports, after cooperating with Meituan, the "third space" has taken on a new interpretation, and the "1971 Living Room" has officially launched. Consumers can even reserve exclusive spaces online to gather with friends or work.

Interestingly, however, setting aside these fancy concepts, Starbucks is essentially still a coffee brand. But what leaves the deepest impression on the public about Starbucks is often its cups, store atmosphere, and the attitude of looking down on people who do not understand "Starbucks culture."

Image source: Internet

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The above content is compiled by CoffeeHunters, a coffee news website.