[Valuable Intellectual Property] "Entering China is Not Difficult... Just Have OO"

⑭ Helping 'Peclodin' Settle in the Chinese Market
Protecting the Brand and Blocking Counterfeit Distribution
"Chinese Consumers Examine Ingredients and Efficacy"
So Popular It Ranks No.1 Among Korean Infant Products

"I have seen many companies get completely wrecked after rashly entering China. Focusing solely on profits led to a failure in brand protection."

Founded in 2019, 'Peclodin' devises distribution and sales strategies and manages intellectual property (IP) to help Korean companies establish themselves in the Chinese online market. Choi Hyung-won, CEO of Peclodin (pictured), who studied law at Peking University, expressed his regret upon seeing Korean companies entering China. He said, "I have seen cases where companies gave up on the Chinese market after suffering from counterfeit issues, or were exploited by Chinese parties and then abandoned." He took a leave of absence and started a platform business assisting Korean fashion companies with online distribution. It began with introducing about ten Korean fashion brands to the Chinese market, dreaming of creating a 'Musinsa of China.' Now, Peclodin has partnerships with around 100 companies across various sectors including fashion, cosmetics, baby products, and health supplements, targeting the Chinese market. They have also handled China market entry for some affiliates of large corporations such as Amorepacific and Shinsegae International. Within China, they collaborate not only with Alibaba Group’s commerce platforms like Taobao and Tmall Global but also with live commerce operators, advertising agencies, and legal law firms.

What sets Peclodin apart from other agencies is its specialization in IP protection. He spoke about company J, a cosmetics firm listed on the KOSPI. "J’s products in China have seen their prices collapse. Searching online reveals about ten listings of the same product priced anywhere from 5,000 won to 20,000 won. This is what we call a price collapse. Counterfeit products are being distributed indiscriminately, making it impossible to know what is genuine and what the correct price is." About ten years ago, Chinese peddlers used to buy Korean products in bulk, and Korean companies focused only on profits, resulting in inadequate brand protection. He explained, "Before signing contracts, we monitor intellectual property rights to check whether counterfeits are being distributed or trademarks have been preemptively registered." He added, "If fake brands are active in China, we send warning letters, prepare legal responses, and only then start business."

Major Clients of Peclodin

He likened the process of helping companies enter China to 'raising a child,' emphasizing the need for comprehensive and meticulous efforts. CEO Choi said, "Chinese consumers no longer simply get excited about famous Korean advertising models or the K mark. They have started to examine product ingredients, efficacy, and quality." Regarding baby products, he noted that the perception of discerning Korean mothers and product competitiveness have supported M Company, a KOSDAQ-listed baby specialty firm, whose fabric softener product ranks number one in China. On the other hand, the cosmetics industry has experienced ups and downs. CEO Choi said, "Low-cost brands that emphasized cost-effectiveness have declined, and only premium brands have survived," adding, "Many cheap and good-quality Chinese cosmetics have emerged, catching up with Korean products." The beauty brand 'Perfect Diary,' which appeared like a comet in China in 2017, became a unicorn (valued over 1 trillion won) and was listed on the US Nasdaq market just four years after its establishment.

For Korean companies facing a limited domestic market, China remains attractive. CEO Choi said, "The sales during the three-day Singles’ Day period, known as China’s Black Friday, are comparable to the entire year’s e-commerce sales of Southeast Asian countries." Alibaba Group, which dominates the Chinese e-commerce market, has a market capitalization of 280 trillion won, about ten times that of Kakao. He advised, "Even if the Chinese market feels unfamiliar, I hope companies practice understanding it. Communication based on understanding is essential to protect the brand." Peclodin plans to hold a seminar on June 29 in collaboration with JK Patent & Law Office for small and medium-sized enterprises aiming to enter the Chinese market, offering free consultations.