OEMs are the logical products of economies of scale and Globalisation. For readers who are unfamilar with OEMS, they are manufacturers that produce goods that are used by other companies for reselling purposes.
For example, there are shirts in TK Maxx and Slaters Menswear that look very similar but with different brand names, like YSL or Ralph Lauren - that's when an OEM makes generic shirts for these "designers". These tend to be the "cheaper" products, like Armani's Emporio Armani and Armani Exchange, D&G by Dolce & Gabbana, Polo Sports by Ralph Lauren and are simply-designed, a little bit vulgar and huge logos of the brands can usually be seen splashed across the front of the garments.
These low-cost lines are seen as cash-cows by major designers, a effective way to milk the good will generated by the high fashion (and highly priced!) products that are still made in the West. To really milk the cow, they use OEMs to manufacture these products.
But as Burberry finds out, branding is a tough little game: the so-called Chavs have taken quite a liking of Burberry products (see this BBC report), but most of them can't afford the real articles. Since Burberry has been using the low-cost method of OEMing and has produced some very easily-copyable products, like baseball caps and cotton t-shirts, people who can't afford to pay take the illegal route by buying fakes.
The problem, of course, is that it is now virtually impossible to distinguish between genuine "designer" or fake labels because they are, indeed, made in the same factories by the same OEMs!
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