What is behind this explosion of counterfeited products, and is it likely that this underground marketplace will continue to expand?
It is one thing knowingly purchasing an imitation designer handbag; however, much more dangerous is dubiously manufactured medicine being passed off as the real deal to unwitting consumers. The same goes for electrical products which could have devastating effects on the health and welfare of the public should the quality fall below industry standards.
A big reason for the increase in counterfeit goods is that quite simply, that they are getting harder and harder to spot, both by consumers and by the authorities. Here are 5 key reasons why this is the case:
- Increased quality– Counterfeit is no longer a code word for poor quality. In fact counterfeit products are increasingly manufactured in the same factories and using the same raw materials as their genuine counterparts. However, these products will have a fake label and serial number attached to them before leaving the factory through the back door.
- Production moving abroad– The vast majority of counterfeited items originate in China, India, and Turkey. It therefore comes as very little surprise that as fashion houses and electronics companies increasingly move their production to Asia in an effort to cut costs, the level of fake products originating from these factories is also on the rise. Less rigorous governance of what is coming in and out of these factories, coupled with more sophisticated production methods are a perfect combination for fraudsters wanting to take advantage of the growing demand for counterfeit goods.
- The role of the internet– The explosion of e-commerce has made it simpler not only for counterfeiters to avoid detection, but also for would-be customers to obtain these goods. Essentially it has never been easier to sell or easier to buy. Anyone can open an online selling platform, and can just as quickly close it down to avoid exposure should they believe the authorities are growing suspicious. Not only can personal identities can be hidden, but customers can easily be fooled regarding the location the product is being shipped from. Additionally, selling online rather than face-to-face makes it much easier to deceive customers when it comes to the quality (or even the exact item) of what is being sold. Defects in manufacturing quality can be hidden by using flattering photography techniques, or alternatively an image of a genuine product can simply be used to illustrate the product.
- Improvements in packaging– It is not just the quality and look of the products which has improved, counterfeiters are now increasingly concerned with copying everything from the packaging, through to the label sewn in to a garment, making the products more and more difficult to differentiate from the genuine article. Fake goods are being sent in containers deliberately made to deceive customs officials attempting to spot and seize counterfeit products as enter the country. The smarter counterfeiters get, the more difficult it is getting for the authorities to spot these products resulting in more and more slipping through the net and entering the supply chain.
- Counterfeits are going unreported– The increase in quality of the products and the attention to detail put in to pass these goods off as genuine not only makes the items difficult for authorities to tell apart from authentic products, but it also means customers are much less likely to report these products as fake. This could be because they are happy with the quality of their bargain purchase, or because the product is so convincing that the customer is simply unaware they have unknowingly purchased a phony item. If the authorities are not being alerted to the fake goods being sold then they are simply unable to do anything to prevent it.
When it comes to counterfeited goods there is a clear moral issue at play – whether you are happy to save some money by buying through dubious channels – but more importantly, there is also a massive safety concern which should not be ignored simply to save a few pounds.