The problem is large for creators of designer bags such as Louis Vuitton and Coach. How can one tap into the Chinese market, which is filled with a fast growing, brand conscious, upper-middle class? Coach hopes to grab a lead on the market by taking control of these retail outlets. Louis Vuitton bags are still being sold in outlets that are not in their control directly and have not yet made any move towards taking control as Coach has. Though, if Coach is successful we may see many designers taking control of or opening direct control outlets.
Meanwhile, Beijing is taking aim at counterfeit operations in the country, attempting to eliminate possible embarrassment over the surplus of cheap counterfeit goods in the country with the Olympics fast approaching. This should be beneficial for Coach by cutting out replica handbags as competition.