**2. Review of literature and research questions**

The primary purpose of this study was to investigate Chinese consumers' knowledge of apparel counterfeits, face-saving, materialistic, and ethical values and their attitudes toward counterfeit fashion goods. Previously, researchers have reported a significant relationship between American college students' knowledge of counterfeit apparel products and their attitudes toward counterfeit apparel products. Specifically, a survey conducted in 2006 reported that 108 undergraduate students with greater knowledge (*M* = 2.50, *a* = 0.86) of counterfeits held stronger negative attitudes (*M* = 3.8, *a* = 0.84) regarding the purchasing of counterfeited apparel goods [14]. To assess the participants' level of knowledge of counterfeits, the authors used a scale measuring consumer concern and knowledge toward counterfeit apparel products [14]. In a similar vein, in 2011, other researchers using the knowledge of counterfeits scale found that 321 consumers in the United Kingdom had less favorable attitudes (*a* = 0.85) toward counterfeit products when they were more knowledgeable about counterfeits (*a* = 0.75). Further, knowledge about counterfeits not only helped Iranian college students to identify a product's authenticity but also decreased their favorable attitudes toward counterfeit products [15, 16]. Given these findings, in order to examine the relationship between Chinese consumers' knowledge of counterfeit apparel products and their attitudes toward counterfeit apparel products, the following research question was devised:

70% of Chinese consumers have a habit of shopping for apparel items at least once a month. Chinese consumers' per capita consumption and spending of textile and apparel goods exceeded more than 600 USD monthly in 2015 [1]. Given the rapid growth of the apparel marketplace in China, the total sale of fashion goods increased from 126 billion USD in 2011 to 169 billion USD in 2015 [2]. The potential of the Chinese apparel market has attracted foreign apparel brands from France, Germany, Italy, Japan, the United States, Britain, and South Korea, among others. Fast fashion apparel firms such as H&M, ZARA, and Uniqlo have also enjoyed a significant increase in sales in recent years in China [1, 3]. The purchase of luxury fashion brands in China have reportedly increased from 12% in 2010 to 22% in 2015—at a time when the luxury fashion market has declined in the United States by 16%, Japan by 10%, and Western Europe by 8%. Following the United States, China maintains the second highest gross domestic product in the world and has become a favorable market for a range of differ-

128 Social Responsibility

ent apparel products given the large fashion-conscience consumer society [4, 5].

those counterfeited products were apparel, footwear, and fashion accessories [7].

bacteria have been detected in counterfeit fragrances [11].

because of the similarity to legally produced goods [13].

**2. Review of literature and research questions**

China produces and sells the highest number of counterfeit products in both domestic and international markets [6]. In the Chinese domestic market, more than 90% of products are counterfeited, which include counterfeit music, movies, software, and fashion goods [7]. In recent years, nearly 600 million of counterfeit products (produced in China) circulated in the global marketplace, equal to at least 87% of total counterfeit sales worldwide. In fact, 57% of

According to previous researchers, evidence exists that a link between the production of counterfeit goods and terrorism exists [8]; this includes the funding of the terrorist organization Hezbollah in Lebanon [9]. The sale of counterfeit merchandise was a major source of funding the 2004 bombing of a Madrid train, which resulted in the deaths of 191 people [10]. Beyond the connection between the production and sale of counterfeit goods and organized crime and terrorist organizations, one coalition confirmed that counterfeit goods present concerns related to social responsibility, that is, the majority of counterfeit goods are most often made using cheap, substandard, and dangerous materials [10] which put the health and safety of workers and consumers at risk. For instance, chemicals such as anti-freeze, urine, and other

To Chinese consumers, "A Products" and "Shanzhai "are terms used to describe counterfeit products that are of very good quality, for example, the designs are near replicas to genuine products. Counterfeit goods are typically produced by the genuine brands' contracted manufacturers or third-party manufacturers without brand owners' permission. Essentially, they are copies of branded apparel products made without copyright permission—which enables the products to be sold at very low prices compared to the original "legitimate" goods [12]. Many Chinese consumers do not consider "A Products" or "Shanzhai "to be counterfeits

The primary purpose of this study was to investigate Chinese consumers' knowledge of apparel counterfeits, face-saving, materialistic, and ethical values and their attitudes **Research Question 1:** Is there a difference of knowledge and attitudes of Chinese consumers toward apparel counterfeits?

Face-saving values refer to a social psychological framework of favorable self-worth that people expect others to respect in public [17, 18]. Face-saving values have been a longstanding concept in Chinese traditional culture, emphasizing the importance of maintaining one's social status by accumulating possessions that symbolize wealth [19]. Past researchers have indicated that because of the strong endorsement of traditional face-saving values, Chinese consumers tend to believe that the best way to show their high level of social status and wealth is through purchasing foreign apparel branded goods (i.e., products carrying the infamous Nike swoosh as an example) [20]. As a result, Chinese consumers with high face-saving consciousness predictably have a greater willingness to spend money on material goods to enhance their level of social status and reputation [21]. Several researchers have found that face-saving values are a significant factor influencing Chinese consumers' purchase decision-making [19–22]. Regarding consumers' consumption values, it has been reported that a relationship exists between Chinese consumers' face-saving values and their purchase behaviors and consumption of global apparel fashion branded goods [20].

Chinese consumers intentionally purchase foreign branded products to maintain and upgrade their social status in public [16]. Nevertheless, these goods, particularly luxury fashion products, typically are sold at higher price points in China as compared to the United States and Western Europe. For instance, the Louis Vuitton Tuileries handbag sold online in the United States is listed at 2490 USD [23], whereas, the exact same handbag sold online in China is listed at 2866.93 USD (¥ = 18,200) [24]. Most of the counterfeit products sold in the Chinese market are imitations of luxury brands, sold at lower price points than the genuine luxury products in China. As such, the following research question was devised:

**Research Question 2:** What role do face-saving values play in Chinese consumers' relation to counterfeit apparel products?

Researchers have also found that consumers with high materialistic tendencies typically consume products with highly recognizable brands in order to derive more pleasure and fulfill their materialistic satisfaction [26]. Over time, globalization and capitalism have shifted Chinese traditional values to become more materialistic and individualistic. In one study, it was noted that Chinese consumers who held strong concerns about the brand status of products were more preoccupied with their social comparison to others given the Chinese facesaving culture [25]. Other researchers have reported that the level of consumer materialism is reflected by the amount of consumption of products and goods [25, 27]. Given these findings, to examine materialism and its relation to attitudes toward counterfeit goods, the following research question was devised:

validity of the survey instrument. After the translation was complete, an online pretest questionnaire was distributed through the Qualtrics online survey method. The primary reason for pretesting the instrument was to confirm that pretest participants understood the wording of the instructions and items in each scale. A total of 25 mainland Chinese volunteers in the targeted regions and age groups completed the questionnaire and were instructed to leave comments at the end, specifying any misunderstandings of words used in the questionnaire or instructions. Based on the feedback from the pretest, some modifications to the questionnaire were made. Specifically, these revisions were focused on restating or removing statements included in measuring Chinese consumers' ethical values. Some of the statements were deemed not suitable and difficult to comprehend among the pretest participants. For instance, pretest participants commented that some of the statements included in the scale measuring Chinese consumers' ethical values were not relatable to the people of China. The statements removed from the measure included: "I don't see a problem in getting too much change and not saying anything," "I don't see a problem with returning merchandise to a store by claiming that it was a gift when it was not," "I think it is okay to stretch the truth on an income tax return," "I think it is okay to not tell the truth when negotiating the price of a new automobile," and "I think it is okay to download music that I did not actually

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The responses collected from the pretest participants were not included in the final sample as a modified instrument was ultimately used, given the feedback collected in the pretest. In order to collect data after the pretest, an online or paper questionnaire was delivered by the SOJUMP survey agent company. The questionnaire for this research was determined by the feedback of the pretest. A total of 63 statements divided into five combined variables were included in the final version of the questionnaire. These computed variables included measures to assess participants' knowledge of apparel counterfeits; participants' attitudes toward counterfeited apparel products; and participants' face-saving, materialistic, and ethical values. Additional demographic questions were also included: age, sex, reported monthly income earnings, education, and reported monthly spending on apparel and accessories. Two qualifying questions were stated on the cover page of the questionnaire, including: "Are you between the ages of 18 and 64?" and "Where do you currently live in China?" Participants who answered "No" or "Other Cities" did not qualify to participate in the study. All computed variables were measured on a Likert-type scale ranging from (1) strongly disagree to (5)

strongly agree. The average time in completing the questionnaire was 25 minutes.

A cover page with a brief introduction was also incorporated as part of the questionnaire. It clearly explained the purpose of the research project and the rights of participants regarding anonymity and confidentiality. Because the terms "Shanzhai" and "A Products" are oftentimes used instead of the word "Counterfeit, "it was necessary to provide the definitions and examples of counterfeit apparel products that included "Shanzhai" and "A Products" on the cover page. This helped participants fully understand the context of counterfeit products.

Participants were sought by utilizing the services offered by SOJUMP [38]. SOJUMP [38] is a creditable survey company that has successfully collected more than 20 million reliable surveys

purchase."

**Research Question 3:** What role do materialistic values play in Chinese consumers' relation to counterfeit apparel products?

Further research has documented the growth of materialistic values among Chinese consumers, given the significant economic growth and higher domestic consumption over recent years [28]. It is plausible that materialistic consumers with lower financial capability might be more likely to purchase counterfeit goods (given lower price points) in order to satisfy their social status needs. Past researchers have noted that consumers' ethical values can potentially have a cause-effect relationship with their purchase decision-making [29–32, 34, 35]. Therefore, the final research question examined as part of this study was in regard to the ethical values and attitudes toward counterfeits among Chinese consumers:

**Research Question 4:** What role do ethical values play in Chinese consumers' relation to counterfeit apparel products?

#### **2.1. Methodology**

The population of interest for this study included Chinese men and women between the ages of 18 and 64, living in four representative cities in China including Shanghai, Guangzhou, Wuhan, and Chengdu. Shanghai, a tier-one city with a population of more than 25 million, is considered the main financial and commercial center in China. Shanghai is also considered the fashion capital of China and has the largest fashion consumer marketplace among all mainland cities. Similarly, Guangzhou, also a tier-one city, maintains an expanding apparel and textile marketplace in China. In fact, Guangzhou's garment wholesale industry encompasses 25% of all apparel production in China. Over the last several years, companies in Taiwan, Hong Kong, South Korea, Japan, the United States, and the European Union have opened trading offices in Guangzhou [33, 36, 37].

This study used a quantitative method approach for data collection through a survey instrument. The scales used to analyze the relationships among the key variables are further outlined in the next section. Prior to pretesting the questionnaire, a postgraduate student studying education and working in an English Language Program translated the survey from English to Mandarin. The Mandarin version was then translated back to English by an instructor working in the English Language Program. This process secured the content validity of the survey instrument. After the translation was complete, an online pretest questionnaire was distributed through the Qualtrics online survey method. The primary reason for pretesting the instrument was to confirm that pretest participants understood the wording of the instructions and items in each scale. A total of 25 mainland Chinese volunteers in the targeted regions and age groups completed the questionnaire and were instructed to leave comments at the end, specifying any misunderstandings of words used in the questionnaire or instructions. Based on the feedback from the pretest, some modifications to the questionnaire were made. Specifically, these revisions were focused on restating or removing statements included in measuring Chinese consumers' ethical values. Some of the statements were deemed not suitable and difficult to comprehend among the pretest participants. For instance, pretest participants commented that some of the statements included in the scale measuring Chinese consumers' ethical values were not relatable to the people of China. The statements removed from the measure included: "I don't see a problem in getting too much change and not saying anything," "I don't see a problem with returning merchandise to a store by claiming that it was a gift when it was not," "I think it is okay to stretch the truth on an income tax return," "I think it is okay to not tell the truth when negotiating the price of a new automobile," and "I think it is okay to download music that I did not actually purchase."

Researchers have also found that consumers with high materialistic tendencies typically consume products with highly recognizable brands in order to derive more pleasure and fulfill their materialistic satisfaction [26]. Over time, globalization and capitalism have shifted Chinese traditional values to become more materialistic and individualistic. In one study, it was noted that Chinese consumers who held strong concerns about the brand status of products were more preoccupied with their social comparison to others given the Chinese facesaving culture [25]. Other researchers have reported that the level of consumer materialism is reflected by the amount of consumption of products and goods [25, 27]. Given these findings, to examine materialism and its relation to attitudes toward counterfeit goods, the following

**Research Question 3:** What role do materialistic values play in Chinese consumers' relation

Further research has documented the growth of materialistic values among Chinese consumers, given the significant economic growth and higher domestic consumption over recent years [28]. It is plausible that materialistic consumers with lower financial capability might be more likely to purchase counterfeit goods (given lower price points) in order to satisfy their social status needs. Past researchers have noted that consumers' ethical values can potentially have a cause-effect relationship with their purchase decision-making [29–32, 34, 35]. Therefore, the final research question examined as part of this study was in regard to the ethi-

**Research Question 4:** What role do ethical values play in Chinese consumers' relation to

The population of interest for this study included Chinese men and women between the ages of 18 and 64, living in four representative cities in China including Shanghai, Guangzhou, Wuhan, and Chengdu. Shanghai, a tier-one city with a population of more than 25 million, is considered the main financial and commercial center in China. Shanghai is also considered the fashion capital of China and has the largest fashion consumer marketplace among all mainland cities. Similarly, Guangzhou, also a tier-one city, maintains an expanding apparel and textile marketplace in China. In fact, Guangzhou's garment wholesale industry encompasses 25% of all apparel production in China. Over the last several years, companies in Taiwan, Hong Kong, South Korea, Japan, the United States, and the European Union have

This study used a quantitative method approach for data collection through a survey instrument. The scales used to analyze the relationships among the key variables are further outlined in the next section. Prior to pretesting the questionnaire, a postgraduate student studying education and working in an English Language Program translated the survey from English to Mandarin. The Mandarin version was then translated back to English by an instructor working in the English Language Program. This process secured the content

cal values and attitudes toward counterfeits among Chinese consumers:

research question was devised:

130 Social Responsibility

to counterfeit apparel products?

counterfeit apparel products?

opened trading offices in Guangzhou [33, 36, 37].

**2.1. Methodology**

The responses collected from the pretest participants were not included in the final sample as a modified instrument was ultimately used, given the feedback collected in the pretest. In order to collect data after the pretest, an online or paper questionnaire was delivered by the SOJUMP survey agent company. The questionnaire for this research was determined by the feedback of the pretest. A total of 63 statements divided into five combined variables were included in the final version of the questionnaire. These computed variables included measures to assess participants' knowledge of apparel counterfeits; participants' attitudes toward counterfeited apparel products; and participants' face-saving, materialistic, and ethical values. Additional demographic questions were also included: age, sex, reported monthly income earnings, education, and reported monthly spending on apparel and accessories. Two qualifying questions were stated on the cover page of the questionnaire, including: "Are you between the ages of 18 and 64?" and "Where do you currently live in China?" Participants who answered "No" or "Other Cities" did not qualify to participate in the study. All computed variables were measured on a Likert-type scale ranging from (1) strongly disagree to (5) strongly agree. The average time in completing the questionnaire was 25 minutes.

A cover page with a brief introduction was also incorporated as part of the questionnaire. It clearly explained the purpose of the research project and the rights of participants regarding anonymity and confidentiality. Because the terms "Shanzhai" and "A Products" are oftentimes used instead of the word "Counterfeit, "it was necessary to provide the definitions and examples of counterfeit apparel products that included "Shanzhai" and "A Products" on the cover page. This helped participants fully understand the context of counterfeit products.

Participants were sought by utilizing the services offered by SOJUMP [38]. SOJUMP [38] is a creditable survey company that has successfully collected more than 20 million reliable surveys for more than 16,000 businesses and 1200 higher education institutions. SOJUMP distributed the questionnaire to the sample population by either a paper copy or through an online Qualtrics survey link. A total of 750 individuals without Internet access were mailed the paper version; another 750 received the link to the questionnaire. Prior to data collection, it was confirmed that SOJUMP had the capacity to distribute the questionnaire in Mandarin characters to participants. Only participants from Shanghai, Guangzhou, Wuhan, and Chengdu, between the ages of 18 and 64, were sought.

the computed variable to assess participants' knowledge of counterfeit apparel goods was acceptable (*a* = 0.89). The summed mean score for this measure was 2.28 (*n* = 1199, SD = 5.10), indicating that overall, participants held very low levels of knowledge of counterfeit apparel

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The scale measuring Chinese consumers' attitudes toward counterfeit apparel products was also adopted by other researchers [14, 39, 40]. Three statements were used to analyze this variable, including: "I would buy a counterfeit apparel product if no one could tell it was a counterfeit," "I am a smart consumer because I own a counterfeit apparel product," and "I like counterfeit apparel." To test the reliability of the computed variable, the Cronbach's alpha was acceptable at 0.84. The computed mean score for the summed variable was 2.86 (*n* = 1199, SD = 3.47), meaning that participants were mostly unsure regarding their attitudes toward

Regression analysis was used to examine the difference of knowledge and attitudes of Chinese consumers toward apparel counterfeits. The analysis revealed a significant inverse relationship between knowledge and attitudes (F (1,199) = 206.53, *p* < 0.001, R<sup>2</sup> = 0.15). The unstandardized coefficient was −0.61, indicating that for every increase in knowledge about counterfeits, the mean of attitudes toward counterfeits decreased by 0.61. These results indicate that participants more knowledgeable about counterfeit apparel products held more

**Research Question 2:** What role do face-saving values play in Chinese consumers' relation to

The scale used to measure participants' face-saving values was originally developed and tested as a reliable measure [22]. A total of four statements were used in computing the combined variable; these included: "I am concerned with protecting my personal pride," "I am concerned with protecting my self-image," "I am concerned with not bringing shame to myself," and "I am concerned with not appearing weak in front of other people." The value of Cronbach's alpha for the computed variable measuring participants' levels of face-saving values was acceptable at 0.82. The computed mean score for the summed variable was 4.02 (*n* = 1199, SD = 2.60), meaning that participants, overall, held strong feelings related to their

Regression analysis was used to explore the role of face-saving values among Chinese consumers in relation to counterfeit apparel products. A significant positive regression equation was found (*F* (1199) = 150.60, *p* < 0.001, R<sup>2</sup> = 0.11), indicating that participants' levels of facesaving values and attitudes toward counterfeit apparel brands existed. The unstandardized coefficient value was 0.59, which showed that for every increase in the level of face-saving values, the mean of attitudes toward counterfeit apparel brands increased by 0.59, revealing that participants in this study who placed greater emphasis on their face-saving values held

more positive attitudes of counterfeit apparel products.

negative attitudes toward the use and purchase of counterfeit apparel products.

products.

counterfeit apparel products.

**3.3. Research Question 2**

face-saving values.

counterfeit apparel products?
