Warc Blog

India's counterfeit market to double

16 January 2014
NEW DELHI: The market for counterfeit luxury goods in India is growing at twice the rate of that for genuine articles and consumer education is urgently needed, according to a trade body.

An analysis by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) indicated that a compound annual growth rate of 40-45% would see the value of the counterfeit market reach Rs 5,600 by 2015, double its current level.

Previously ASSOCHAM has estimated that counterfeits are around 5% of the total luxury market in India. It said the increase was being largely driven by web shopping portals which now accounted for 25% of the market in fakes.

DS Rawat, secretary general of ASSOCHAM, identified counterfeit goods as being mostly handbags, watches, shoes, clothes, hats, sunglasses, perfume and jewellery and said 80% of them came from China.

"There is an urgent need to educate customers on brand heritage and create awareness about original products as they cannot be substituted," he said. He also urged manufacturers to offer certifications of authenticity and deploy multi-channel protection programs and appropriate technologies to combat the trend.

Other measures that could be taken included "effective intellectual property enforcement, plugging loopholes in the legal and judicial structure and higher conviction rates".

The absence of such activity resulted in a dilution of brand equity and a reduced trust in brands, he maintained.

He noted that many aspiring customers could not afford genuine articles and knowingly bought counterfeit versions on global websites, typically registered outside India, that shipped items after payment.

"Luxury brand owners and online service providers need to work in tandem to address the sale of counterfeits and protect trademarks over the internet," Rawat declared.

"Shopping websites should also take concrete steps to educate their users about the sale-purchase of fake products and its repercussions," he added.

Separately, Ankur Bisen, senior vice-president of retail and consumer products at consulting firm Technopak Advisors, told Livemint that income was not necessarily a factor in choosing to buy counterfeit goods.

"Even those who can afford the original opt for fakes owing to desirability and awareness reflective of a value-conscious shopping behaviour," he said.

Data sourced from ASSOCHAM, Livemint; additional content by Warc staff

 
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