Okonkwo Prelims

The menace of fake luxury goods

To commence the discussion of this highly important topic, it is imperative to

set the record straight by defining counterfeiting and its boundaries. There are

four levels of the luxury faking business:

1Acounterfeit product refers to a 100 per cent copy of the original product

made to deceive consumers into believing that it is the genuine product.

2Apirated productis a copy of a genuine item but produced with the

knowledge that the consumer will be aware that the item is fake.

3 An imitation product is not 100 per cent identical to the original product

but is similar in substance, name, design, form, meaning or intent and

consumers are often aware that it is not the original product.

4Acustom-made product is a replica of a trademark design of branded

products made by legitimate craftsmen who may have some connection

with the brand.

Having clarified these definitions, it is obvious that the luxury goods sector

battles all four groups of fake products, albeit in differing degrees. On the

first level, counterfeit goods are sold in some markets by people who claim

to be authorized agents of luxury brands. These goods are traded every-

where, from the kitchens of housewives in San Francisco to side-street stalls

off Oxford street in London; Canal street in Manhattan and various market

‘hot-spots’ in Hong Kong like the Temple street market; and also in China

and Taiwan. Imitation and custom-made fakes hold a minor proportion of the

trade in fake luxury goods. For example, the Hermès Birkin and the Vuitton

Speedy bags have been greatly copied by other non-luxury designers who

have quoted the brands as their sources of inspiration. Do these products

represent fakes?

Fake products, whether counterfeits, imitations, pirated or fake custom-

made pose an ongoing problem for luxury brands. Apart from the legal impli-

cations, which are important, fake goods cause enormous harm to brands,

consumers and also their vendors and manufacturers. It damages a brand’s

image, over-exposes high-end brands, reduces a brand’s equity and costs

companies a lot to curtail. Fake goods also lower the self-image of counter-

feit product consumers and add to their mental stress by creating an increased

desire for products that they might not be able to afford. For the vendors and

manufacturers, there is the continuous fear of being caught by increasingly

vigilant authorities.

These adverse effects not only exist within the luxury sector, they also

affect governments and economies. In 2003, the counterfeit goods market

cost New York City more than $1 billion in taxes, an immense weight on the

state’s economy. This led to increased vigilance and seizures of counterfeit

goods across the USA. Counterfeiting of fashion goods is a menace and has

172

luxury fashion branding