Luxury Goods Pay the Price
Premium brands top global trade in fakes
According to a new report by the OECD and the EU’s Intellectual Property Office, the global market for imported counterfeit goods has been growing steadily for years and now accounts for 3.3% of all global trade. The luxury industry alone accounted for 60-70% of the total $4.5 trillion trade in fakes in 2015, reports the Harvard Business Review.
The OECD report above finds that of the brands or patents seized in 2016, the countries most affected by counterfeiting were the United States (24%), France (17%), Italy (15%), Switzerland (11%) and Germany (9%). Of the items seized at US customs in 2018, the top categories included many luxury products, including clothing and accessories (18%), footwear (14%), watches and jewellery (13%), handbags and wallets (11%) and consumer electronics (10%). Most fake goods found at customs checks originate from mainland China and Hong Kong, while the United Arab Emirates, Turkey, Singapore, Thailand and India were other major points of origin.
One third of counterfeit luxury good purchases are made online. Large online retail companies such as Alibaba, eBay and Amazon have been criticised for carrying fake goods on their platforms while there has been a proliferation of websites selling fake luxury items at a lower price. Amazon has taken steps to resolve the issue by launching Amazon Project Zero, which aims to stop counterfeits on its platform.
But in a constantly evolving digital world, where does the responsibility lie? While luxury brands have been investing heavily in ultra-sophisticated tech solutions to protect their products, counterfeiters too are getting smarter. Jack Ma, founder and CEO of e-commerce giant Alibaba, has even argued that some fake products are now as good or better than the genuine article. And while China is the origin of a high proportion of the word’s fake goods, the long-scorned “Made in China” label is increasingly well-respected in some buyer circles.
In the future, not only well-known global brands manufacturing luxury goods in China, but also domestic Chinese companies manufacturing specialised high-value products will stand to benefit from incorporating anti-counterfeiting security solutions and brand protection technologies into their manufacturing and supply chains.