Due to increasing globalization in the second half of the 19th century, trade in the European market grew rapidly. Britain was the leading industrial nation in Europe that time. Many European nations tried to make money on this success and copied successful British products. To protect internal market from imitation goods and make British buyers to buy British, England passed a law forcing foreign companies—which had been manufacturing copycat British products—to make the origins of their products clear. So the label originated in 1887. The British wanted to stigmatize imitation goods from Germany, in particular. That time Germany was to Britain something like China is to Europe. ««It affected cutlery, scissors and knives manufactured in Solingen, for instance, but it also affected machinery made in Saxony,» Werner Abelshauser, economic historian at the University of Bielefeld in Germany. Abelshauser believes that two notions played a role in creating the law: on the one hand, there was the aim to protect British consumers from buying shoddy imitations of the high-quality cutlery made in Sheffield. On the other hand, German mechanical engineering - which was already superior to the British even then - was supposed to become stigmatized by being given a negative label.» (Source: Deutsche Welle)
In 1891 the “Madrid Agreement Concerning the International Registration of Marks” entered into force. Most trading nations agreed to ban false information about origins from being printed on products. Each member nation of the pact agreed to use its own «Made in …» label.
However the plan backfired. Due to high-quality products with an optimal price, the label «Made in Germany», which was supposed to be a warning, quickly became popular. The growing confidence to German products finally ensured the explosive growth of the German economy at the turn of the century. Due to the German economic miracle after the end of World War II and the resulting high export ratio for Germany the myth «Made in Germany» was further consolidated. The label «Made in Germany» ultimately turn into a seal of quality.
Today, companies in Europe apply origin labels only if they want to—with the exception of food companies, which are more heavily regulated—and if a German clothier does most of its production of a jeans in, say, North Africa or Asia, but puts the final details on the item in Germany, it can still use a label claiming the item was «Made in Germany.»
Based on statistics portal Statista for consumers, the seal Made in Germany is often associated with high quality and high security standards. Many think of German latest technical standards and reliability. That's why consumers are willing to pay more for a product. For many manufacturers, it is therefore very attractive to use this label for their own products. The label continues to be well-respected and is a significant reason people choose to buy a product, especially in industries where German products are world leaders: vehicle and machine engineering, electronics and chemicals.