Counterfeit or fake luxury goods have been in existence for centuries as early as
2000 years ago. The most common class of counterfeit goods is apparel (clothing,
accessories and shoes). Other popular counterfeit products include watches and jewelry,
consumer electronics and pharmaceuticals.
The size of the counterfeit goods market is difficult to measure because we can only
measure what is being caught by the authorities. It is almost impossible to measure
the amount of counterfeit goods which are sold successfully.
Nevertheless, the best
guess of the counterfeit market is approaching a trillion US dollars involving up
to 150 countries. Manufacturing and selling counterfeit goods is a form of consumer
fraud because a product is sold as something that it is not.
Four Kinds of Counterfeit goods
Counterfeit or fake luxury goods have been a threat to the luxury brands around the
world for many centuries. There are essentially four kinds of "fake" goods:
A 100% copy of the original luxury product. It is made to deceive
or trick the consumer into buying it, thinking that it is the real thing.
A copy of the luxury brand. However, it is not made to deceive the
consumer. Consumers buy it knowing that it is a fake product.
Made to look similar but not identical to the luxury brand. Consumers
buying an imitation product often know that it is not the real product at the moment
Custom Made Products
Replicas of a trademark design of branded products by legitimate
craftsmen. They may have an association with the brand.
Selling of Counterfeit Goods
Luxury brands around the world are faced with all four types of "fake" goods. Imitation
and Custom Made fake products poses less of an issue with the world luxury brands.
Counterfeit goods are sold around the world as the real thing by so called authorized
agents. They can be sold in a housewife's kitchen or the back alleys of some of
the world's hot spots for counterfeit goods. Hot spots include Canal Street in Manhattan
of New York City, Spadina Street in Toronto, Oxford Street in London, and Temple
Street in Hong Kong.
Impact of Counterfeit Goods
Here are some key impacts of counterfeit goods:
The sale of cheap counterfeit goods negatively impacts a brand's equity or value.
Cheap imitations tarnish a high quality, luxury brand's reputation. Even though
vendors and manufacturers of fake goods are always on the lookout for the police
or investigators, the threat has not stopped the lucrative international fake goods
Counterfeit goods make their way to the world's biggest shopping mall, the World
Wide Web. Numerous counterfeit goods have shown up on eBay. Some global brands have
taken action and sued eBay for permitting counterfeit goods on its website. EBay
was forced to take action shutting down sellers of major brand counterfeit goods.
The sale of fake goods also cost the local government in terms of tax revenue. The
city of New York alone has been estimated to be missing out on more than a billion
dollars' worth of tax income. There is also the concern of public safety especially
with inferior counterfeit pharmaceuticals.
Importers - Beware of Counterfeit Goods
China has been criticized as being the major source for the world's counterfeit goods.
In an effort to address the issue, China joined the World Trade Organization and
began to set national policies on anti-counterfeiting.
As a legitimate importer who wants to conduct business with China, you need to be
aware that the counterfeit goods industry is still thriving. Do not get tricked
into importing something that it is not. Fraud exists everywhere.