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BW Businessworld

Being Duped By Fake Goods?

Supplements are faked 22 per cent of the time and 16 per cent of medication is illicit globally

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What is the magnitude of fake goods or counterfeit products worldwide?
Visual Capitalist reports that $323 billion of such illicit stuff  hit the global economy in 2018.  
The US Accountability Office ascertains that 25 per cent of consumers in the United States are duped by non-genuine goods, be it Cuban cigars, Louis Vuitton bags, Levi’s Jeans, Rolex watches or Benson & Hedges cigarettes. It also asserts that two of five brands are susceptible to being counterfeited. Counterfeiting sure has become big business.

Four categories of products are duplicated most often. Make-up items are 33 per cent of the time vulnerable to being reproduced cheaply.  Skincare is susceptible to imitations 25 per cent of the time. Supplements are faked 22 per cent of the time and 16 per cent of medication is illicit globally.

No wonder manufacturers worldwide grapple with the issue of counterfeiting to protect their consumers. Their primary concern is that fakes undermine the intellectual property rights (IPR) of manufacturers. The second issue of concern is how the proceeds of sales of counterfeits may be used.

Companies in the United States, for instance, face a threat of their IPR being stolen by counterparts in China. In China fake duplicates are available in plenty of almost all fast moving items, especially watches, leather goods and apparel.

Secondly, profits earned from sale of fakes can be used for criminal activity, including terrorism. Thirdly, counterfeit iPhone chargers can often be quite unsafe, while illicit drugs can cause illnesses and mortality. Surprisingly, counterfeiting is never a G8 or a G20 agenda item, despite huge implications for all top brands worldwide.

In India, fake cigarettes are a big menace as consumers love showing off  the top world brands. Illicit liquor is also quite common, especially Johny Walker. Multinationals like Hindustan Lever, Nestle and Proctor & Gamble have initiated hundreds of court cases to contain this fraud.
Pirated CDs of Hollywood and Bollywood films are also significant. The government needs to put in place a policy to treat counterfeiting as a major fraud.

What is the source of fake goods? Experts believe 39 per cent are marketed through online market places, 34 per cent are found through search engines, 22 per cent are delivered through mobile apps and the rest through various forms of advertising. Clearly, a good regulator can monitor the menace technologically.

While it is true that 3D printing enables easy copying, consumers need to be vigilant to distinguish between real goods and fake ones. Verification from manufacturers’ websites and examining the price quality combination can throw up enough evidence to prevent duping. Governments globally need to set up a consumer redressal forum to deal with largescale complaints.

Fakes can’t take over if consumers, manufacturers and governments put their heads together to find solutions. Fakes do not survive under vigilance, for vigilance tracks down fakes if  the will exists to do so.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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J.K. Dadoo

The author is a retired IAS officer

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