From time to time, I run into companies that refuse to sell their products to China for fear that their products will be copied. MicroPilot has been doing business in China for well over a decade. The first time we shipped autopilots to China was a bit worrisome but in the end, I decided to see what would happen. Of course, our first autopilots were copied. For many years, for every autopilot we sold in China there were likely half a dozen copies sold. Interestingly enough, even though there were copies available, we kept selling autopilots in China. Clearly a segment of the market wanted the real thing.
When I first thought about our products being copied I assumed there would be some reverse engineering involved but that was not the case. Our autopilots weren’t copied until someone figured out how to bypass the copy protection mechanism on our autopilot’s logic device. The logic device on that particular autopilot was not all that complicated so the autopilot could have been copied much earlier by reverse engineering the logic device. No one made the effort. That autopilot wasn’t copied until someone devised what was essentially a photocopier for all of the components on the autopilot.
While I could have refused that first order to China, I believe our autopilots would have been copied anyway. Our ITAR controlled competitor in the US certainly never sold their autopilots in China and their autopilots were also copied in China. So, all we would have accomplished by refusing to sell to China is forgo some revenue and miss building relationships with some good Chinese customers.
It’s important to understand that many Chinese companies don’t want to buy copies, especially copies of complex and critical components, such as autopilots for their drones. On many occasions I have encountered Chinese companies that were very concerned that they purchase original components. Their challenge was that the very chaotic nature of the distribution systems within China make it difficult to distinguish copies from the real thing.
I don’t think that avoiding the Chinese market is a reasonable strategy. If someone wants your product they will get it one way or another. By all means, take appropriate precautions, certainly we did, and have not been copied since. If you refuse to sell in China you just forgo some revenue and miss out on an opportunity to understand a market with huge potential.