Dilemma of Counterfeit Goods Research Paper

People Buy Counterfeit Goods

The Dilemma of Counterfeit Goods

Counterfeit goods production and sale has in recent times grown to become a multibillion dollar concern. Indeed, as McIntyre points out, it has been claimed by several economists that the sale of counterfeit products accounts for approximately eight percent of the GDP of China. According to the author, most of these counterfeit products end up in America. It is however important to note that the problem of counterfeit goods has also been an issue in many other parts of the world. Recently, police in France dismantled an international counterfeiting ring that was raking in huge sums of money from the sale of counterfeit versions of Birkin bags (Huffington Post). Based on the findings of the survey I undertook, there seems to be a positive relationship between the likelihood of an individual purchasing a counterfeit good and the cost difference between counterfeit and genuine goods. The fact that counterfeit goods are cheaper than genuine goods motivates most people to go for counterfeit goods. This is an assertion further supported by the existing literature on the subject. It is also important to note that based on my review of literature and the survey findings, consumer purchases are to some extent influenced by society norms.

In regard to counterfeit goods, Howie points out that “while shoppers are happy with the price, they are often nagging doubts about the items’ quality, their legality and who ends up profiting.” Away from the legality and quality of counterfeit goods and questions about who actually benefits from their sale, the market for counterfeit goods can only be described as booming. According to a recent study funded by the EU, the number of those who buy counterfeit goods carrying the labels of top designers stands at three million (Howie). This is the clearest indicator yet that there is a good number of people who would rather go for a counterfeit product as opposed to the real thing. According to the survey that I conducted, 59.6% of participants claimed they knew someone who had in the past purchased a counterfeit product. Non-deceptive purchases should in this case be contrasted with deceptive purchases. In the latter, consumers are duped into purchasing fake products in the belief that they are original (Ali). Although one could indeed argue that maybe some consumers are duped into purchasing counterfeit goods in the belief that they are purchasing the “real thing,” Howie notes that according to a professor from the University of Durham, “consumers are rarely duped by the black market manufacturers, instead welcoming the choice offered by fakes.”

American consumers according to McIntyre are bargain hunters. Indeed, as the author further points out, it is this characteristic of American shoppers that has seen a significant increase in the number of counterfeiters — mostly from China. In the words of Ali, “the most obvious factor motivating customer purchase of counterfeit products is their relatively low price…” According to Ali, one category of those likely to purchase counterfeit goods includes those individuals whose attitudes towards established businesses are rather negative. Those in this category are merely trying to beat the system which they deem unfair, especially when it comes to pricing of genuine products. Indeed, most individuals in this category according to Ali are convinced that the price set for genuine products is unfairly high. It is for this reason that they buy counterfeit goods which they can easily find at a much cheaper price.

As Ali further points out, there are also those who would want to maintain a certain image although they do not have the resources to do so. Those in this category would stop at nothing — including buying counterfeit products — to look trendy or fashionable.

Individual testimonies from those who purchase counterfeit items with the full knowledge that such items are counterfeit seem to also indicate that cost considerations and the desire to look trendy informs such purchase decisions. Indeed, a good number of those interviewed by the Sunday Telegraph admitted to having purchased fake items just because they could not afford the more expensive versions of such items (Howie). For instance, one of those interviewed had a counterfeit Louis Vuitton bag whose value she claimed was £40 (Howie). A real Louis Vuitton bag goes for no less than £1,900. Thus as Howie correctly points out, this particular customer was able to get something that resembled the real thing for a price “almost 50 times less than the price for a similar bag by the designer.” It is also important to note that celebrities have not been left out on this one. Taylor Armstrong is one of those celebrities who have recently been on the news for all the wrong reasons — owning a number of counterfeit bags. According to the Huffington Post, Taylor was found in possession of “several fake Birkin bags.” It is instructive to note that Taylor has reportedly been undergoing serious financial challenges in recent times. The pressure to “fit-in” regardless of her financial situation could have informed her move to acquire the fake bags. As per the findings of my survey, most respondents were against the purchase of counterfeit goods. The fact that people still purchase such goods is a clear indicator that the pressure to fit-in is indeed much stronger. The majority of respondents in this particular case were also convinced that the fact that genuine goods were more expensive than counterfeit goods was one of the major reasons as to why people bought counterfeit goods.

It is however important to note that apart from the factors I highlight above, there are a number of other factors that play an important role in inducing people to buy counterfeit goods. One such factor according to Ali is little respect for the law. In this case, individuals who do not respect the existing laws of the land which ban the purchase of counterfeit goods amongst other things are more likely than not to purchase counterfeit goods. Next, it is also possible that some of those who purchase counterfeit goods are just curious and hence out to experiment (Ali).

Counterfeits: What are the Consequences?

The top three counterfeited goods that find their way into the U.S. according to McIntyre are footwear, consumer electronics, and backpacks/wallets/handbags. When it comes to counterfeiting, these are the products whose genuine versions in McIntyre’s opinion lose the most cash. Others include but that are not limited to children’s toys, pharmaceuticals, and watches. Over time, there has been sustained debate over the actual impact of counterfeit products on not only the economy but also on businesses and individual citizens. A study funded by the EU seems to have given counterfeit goods a clean bill of health. According to the study, “consumers benefit from the market for knock-off designer clothes at knock-down prices” (Howie). The study as the author further points out also came to the conclusion that the losses companies claim they experience as a result of the availability of counterfeit goods in the market are largely exaggerated. This is more so the case given that those who purchase counterfeit goods are not likely to purchase genuine goods under normal circumstances. It is also important to note that in the recent past, the quality of counterfeits available in the market has greatly improved (Howie). The safety risk posed by these products is therefore going down.

Works Cited

Ali, Haider. “Why People Buy Counterfeit Brands.” Open Learn. The Open University, 14 Feb. 2008. Web. 5 May 2013 < http://www.open.edu/openlearn/society/the-law/criminology/why-people-buy-counterfeit-brands>

Howie, Michael. “Fake Goods are Fine, says EU Study.” The Telegraph. The Telegraph Media Group Limited, 29 Aug. 2010. Web. 6 May 2013 < http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7969335/Fake-goods-are-fine-says-EU-study.html>

McIntyre, Douglas. “The 10 Most Counterfeited Products Sold in America.” Daily Finance. AOL Money and Finance, 15 March 2011. Web. 6 May 2013 < http://www.dailyfinance.com/2011/03/14/the-10-most-counterfeited-products-sold-in-america/>

The Huffington Post. “Hermes Celebrates Bust of Counterfeit Birkin Ring Aided by Actual Employees.” The Huffington Post. HuffPost Style, 15 June 2012. Web. 5 May 2013 < http://www.huffingtonpost.com/2012/06/15/hermes-birkins-fake-counterfeit-ring_n_1600620.html>

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