When a small/medium EU clothing company can setup their own Taobao store easily and cheaply, sell online without overwhelming competition from counterfeiters, repatriate their earnings without significant issues, then perhaps we can consider the playing field levelled somewhat.
I've said this before, and I'll say it again. China is the same as the US in this regard. If you're looking to access China to get rich, you're doing it wrong. You'll very likely fail. (Unless you're a six foot plus black guy with a wicked 3 point shot.) You access China to make someone in China rich. You'll experience a good deal more success doing things that way.
And even in the context of GP's example, the small/medium Euro businesses are in high demand. That's why the counterfeits are selling to begin with. If you're an in-demand fashion brand, it's not as hard as you describe to get into big retail or open boutiques.
The fashion market in the US and China are comparably difficult for a US based business to access. That's just reality. I didn't comment on Euro businesses, because I don't know how things work in Europe. But I doubt that you can get into Nordstrom, Target, or what have you as easily as you claim simply because you are European. Maybe you mean it's easy for Euro fashion houses to get into EURO retail outlets. But American outlets are just hard to access for everyone. That's just reality.
Chinese market is hard to access too, again, just reality. (Again, it gets easier for an American if you are a six foot plus black guy with a wicked three point shot who's already famous in China. His success is more a function of popularity than access.)
Especially with low-tech products like clothing, you can easily buy fakes that have equivalent (or better) quality than originals at 1/5th of the US/EU price. You’re not paying expensive EU/US staff wages, company taxes, export costs, duties, design fees, branding and marketing costs. The base cost of a $120 pair of NIKE shoes is around $10 - it’s easy to find counterfeit Nike that cost $20 with great quality.
As a consumer I 100% approve of this practice, go Chinese clothes manufacturers! And I can use the $110 that I saved by purchasing a product/service from an industry that doesn't rely on rent-seeking (IP is mostly rent-seeking nowadays).
Western consumers are so removed from clothing production that they’ve lost sight of how vast the gulf is between real and perceived value. Paying 10x or 20x the manufacturing cost for what is essentially a commodity item with zero technology or innovation is insane.
That said, brand and design do have some value. There’s a reason why Chinese consumers and counterfeiters have insane appetite for western brands, but western consumers would struggle to name a single Chinese clothing company.
While the average counterfeit probably spends 1/1000th the marketing cost Nike does per dollar of revenue, without any marketing there could not be any sales.
I assume it is the case in the East.
Chinese factories are also able to manufacture excess high quality inventory beyond what their foreign customers order.