“Is that Gucci real”, “Oh no, those shoes say Nike, but they aren’t”.
Sounds familiar? What we might rejoice as an easy deal to own branded luxury without a price, indeed comes at an exorbitant one. The counterfeit products are bogus, but their blow is real. In 2020, the business of counterfeit as a globally illegal business has a worth of 1.82 Trillion USD, justifying the attraction towards it, making it nearly 10% of total global trade.
What is counterfeiting?
Counterfeit products are disguised by introducing familiar and famous brand names, logos and even certification marks, making them appear just as indistinguishable replicas. This is a carefully directed business which often relies on cloning not just the products of famous luxury houses, but even the packaging, box designs and presentation art and that’s why they are easily falsely sold under their name, without their knowledge. People choose to purchase from a certain brand as an obligation to the quality and features promised, however, counterfeit goods avert consumers, in the sense, the consumer isn’t getting what he actually wanted to buy.
Some consumers are deliberate fans of counterfeit merchandise, simply because it offers them psychological contentment of holding brands they can’t actually afford and have absolutely no regard with the quality. There is a tremendous appetite for fake alternatives, for social approval or just for the love of high-end brands, giving fire to this illegal business. Does spending $2,500 on a branded good made in China look smart when you can get a made-in-China fake version (possibly from the branded company’s supplier) that looks pretty much the same?
If you believe these goods are found on streets at too good to be true costs, then you’re mistaken. This is a larger and deeper business than you thought. These products are all over at local small business centers, big box stores and online retail stores. But how can you spot them? Look out for 3Ps – price, packaging and place. If the price looks too good to be true, it probably is. If the packaging is suggestive of low quality with tons of printing errors, don’t buy. If you accidentally land at the duplicated sites selling goods, search for FAQs, reviews and contact options.
What is the problem with this hugely spread illegal business?
An even hazardous consequence is the fraudulent use of authentic certification marks, which simply means the consumer is fooled to believe the ingenuine quality and safety of the products. Medical goods, makeup, hygiene products that are an outcome of counterfeiting are home to toxic materials, so are the fake electronic items like chargers, batteries or even devices. Put simply, these products are responsible for health dangers, electric device explosions, and greater threats. An even greater issue is that these products are manufactured in sweatshops that involve child labour. Organized human and drug traffickers monopolize this trade and most of them are part of criminal groups. Online counterfeits are also exactly the source of most identity thefts and credit card frauds. Isn’t it an alarm when trusted crypto wallets like Trezor have warned of nearly indistinguishable versions of their hardware stealing users’ protected currency?
Chinese manufacturers are often accused of stealing and reproducing the intellectual property of companies, which cheapens their work. As a counter, these companies push back with tariffs and Chinese producers are paying the price. Consequently, the prices soar, and consumers have to pay more for the same product.
The role of brands
When a brand’s carefully crafted products are imitated, it ventures beyond the bottom line and hits directly at one of their most precious assets: brand image. The sale of counterfeits negatively impacts the brand’s revenue and damages their image if the low-quality products cause trouble. Thanks to the social media explosion, the line between a real and a fake product is blurred now.
The war of brands against counterfeiters has lasted for years now. Brands have heavily invested in ultra-advanced technology to authenticate its offerings and lobbied the State to hunt and shut them down, prosecute the dealers and block websites making false offers. LVHM is known to have a minimum of 60 lawyers while it spends $17 million every year on anti-counterfeiting legal action. However, their efforts haven’t been so successful in bringing down the millions worth of fake goods trade, 60% of which is purely luxury replicas. With an even easier platform, that is the digital world powered by the internet, the anonymity to e-commerce sites that it provides aids with this business to no end.
What we can decipher as a failure to curb the growth of this illegal exchange, is that the brands are becoming increasingly hollow. Most brands are status symbols, but that’s it. They focus on ‘signaling’ rather than ‘delivering’ luxury, with their logos heavier than the product itself. Also when these big houses decided to out-source production to low-cost countries, the relocation resulted in lesser control over supply chains, design and manufacturing and designing processes. At the same time, the prices of luxury products have skyrocketed. What initially started as an initiative to contain Chinese tourists buying abroad and reselling at home, resulted in unprecedented hikes. For instance, a Chanel handbag costs 70% more in a span of just 5 years!
Other brands were bound to follow suit. Enchanted by the initial profits emerging from this strategy, most brands like Dolce & Gabbana phased out their more affordable entry-level brands.
all this collectively prevented any eyebrows to be raised or even concerns in regard to purchasing fakes. Maybe, the emphases require a shift from fighting counterfeiters to self-rediscovery for powerful brands.