$500 billion is lost to counterfeiting every year. That’s 3.3% of world trade, and US, Italian, French, and Swiss brands are the most affected.
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That’s according to a March, 2019 report from the Organization for Economic Cooperation and Development (OECD): Trade in fake goods is now 3.3% of world trade and rising.
With counterfeiting websites on the rise, many fake sites will steal pictures of the original item to lure in unsuspecting consumers.
Despite these false pretenses and the huge number of fraudulent transactions, fewer than 10% of counterfeiting victims will ever report to law enforcement.
What industries are at the most risk for counterfeiting?
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Footwear is #1
22% of all counterfeit goods seized are footwear. The most common brand victims are Nike, Adidas, Louboutin, and UGG.
Have you ever heard of ‘FUggs’?
2.5 million pairs of faux UGGs have been seized by US Customs since 2007.
If you do a Google search for counterfeit shoes, you’ll find dozens of cases of knockoffs being seized across the US, and approximately 20% of the people who admit to buying fake shoes also admit that they began their search looking for the genuine item.
This counterfeit industry is so big that a short documentary was produced by Vice News on the story behind China’s fake sneaker capital.
Why are shoes are the most counterfeited item in the world?
The demand in the ‘authentic’ shoe industry has been skyrocketing.
With dozens of celebrities endorsing shoes and fitness programs, the appetite for new, stylish shoes, especially sneakers, has exploded.
With the luxury brands driving prices up to maintain their exclusivity, the shoe industry has created an impossible demand for products that counterfeiting industries are happy to fill.
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Clothing
Many of the fashion-forward desire to keep up the appearance that they’re on top of the latest fashion trends.
This is a very expensive endeavor, and with social media dominating today’s culture, owning brand name clothing has more impact on people’s impressions than ever.
Counterfeit clothing accounts for 16% of all counterfeit goods in the world, with the EU losing the equivalent of 10% of their total sales to counterfeit clothes, shoes, and accessories.
However, unlike nearly every other industry that is a victim of counterfeiting, when you Google counterfeit clothing, instead of finding news about counterfeit goods being seized, the search results instead yield dozens of sites that direct you to sites where you can buy the most high-quality fakes — but good luck returning them.
And the most popular brands to counterfeit are the top outdoors clothing store, The North Face, Levi’s, and Ralph Lauren’s signature polo shirts.
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Leather Goods
The leather goods industry, which makes up 13% of seized counterfeit goods, is home to the most luxury brands, from Michael Kors to Coach to Louis Vuitton–the most pirated luxury brand in the world.
Who wants to spend a few thousand dollars on a designer bag when they could get a pretty good copy of it for just $300?
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- $309 (counterfeit)
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- $1,390 (real)
Who’s going to notice?
How about this one:
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- Counterfeit
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- Authentic
They look the same, right?
They are. The image on the left comes from a knockoff Gucci website and sells for $298.97. The image on the left comes from the real Gucci site and goes for $2,500.
This industry takes counterfeiting so seriously that Michael Kors and Gucci both quit the International Anti-Counterfeiting Coalition when Alibaba, a Chinese company notorious for listing and selling counterfeit products, was allowed to join.
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Electronics
12% of counterfeit goods are electrical equipment, and the electrical equipment counterfeit industry is so good at what they do that they’ve even got their employees fooled.
In China, 22 fake ‘Apple’ stores were shut down. They had an Apple logo and the employees all sported the signature blue shirt and all of them believed that they were employed by Apple.
This might make you laugh but these counterfeit products are also some of the most dangerous within the counterfeiting world.
In 2013, a 23-year-old Chinese flight attendant was electrocuted and killed by a fake Apple phone charger.
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Watches
But while Apple fakes may win the award for most convincing industry, watches are by far the most theatrical.
In 2010, 7,000 Rolex replica watches were confiscated and promptly crushed by a steamroller.
Luxury brands are not only expensive, but they are also exclusive and sophisticated. The high cost of owning a designer watch means that 15-30% of people searching for watches on the internet are looking for replicas.
Watches alone take up 7% of the counterfeit goods seized in the world, but with the counterfeits being so convincing, it is not hard to believe that there may be many more slipping through the cracks.
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What’s Left?
Medical Equipment, Perfumes, Cosmetics, Toys, Jewelry, Pharmaceuticals, and more…
Unfortunately, what these industries lack in counterfeit product quantity, they make up for in the number of deaths and injuries their counterfeits can cause.
It is a good thing pharmaceuticals, at 1%, are the least counterfeited industry listed, because they can do a lot more than embarrass you if someone finds out the product is fake.
Tamiflu, a prescription medicine that is used to treat the flu, is one of the most counterfeited drugs in the world, and the fakes are estimated to kill at least 1 million people a year.
Walt Disney Company is another one of the most counterfeited brands in the world, and although Elsa may look the same no matter who manufactures this toy (ahem…China), counterfeit toys are far more likely to harm children than the real item.
Additionally, counterfeits like fake medical instruments can provide people with false readings, and it is not uncommon for faux cosmetics to contain cyanide, lead or mercury.
The moral of the story? Go legit.
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Other Effects of Counterfeiting
Even though not all counterfeits are going to physically harm you, it doesn’t mean they don’t have harmful effects.
Counterfeits hurt the economy, popular brands, and the workers, both in and out of the counterfeiting world.
Workers who are after legit jobs are less likely to find work and more likely to lose their jobs as companies are forced to compete with the fake industries.
Additionally, the facilities that are making these knockoffs, 88% of which are in China, do not meet the safety regulations or comply with the worker’s rights that are enforced in the US and other countries throughout the world.
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Most Common Counterfeit Platforms
As much as we love that two-day shipping, Amazon is one of the most commonly used platforms for counterfeits.
Additionally, Taobao and Aliexpress, two major companies owned by Alibaba in China, have been pinpointed as major hotspots for buying counterfeit goods. It is estimated that 67% of items sold on Taobao are counterfeit.
Although eBay is another common platform for counterfeiters, it is also one of the easiest sites to combat counterfeiting. Not only can buyers opt to use a setting that guarantees them legitimate products, but any product found to be counterfeit can be taken down fast.
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Conclusion
Counterfeit products have the potential to damage everyone.
Consumers can be severely affected whether they experience damage to their reputation or physical damage to themselves due to unsafe products.
Brands lose out on massive amounts of revenue to counterfeiters and can have the brand’s reputation threatened if a faulty counterfeit is taken for a legit product.
Approximately 2.6 million jobs are lost due to counterfeiting and because these products are smuggled and sold without tax it threatens the growth of the economy as well.
Even the counterfeiters aren’t safe as being convicted of counterfeiting can result in fines up to $250,000 and jail time of up to twenty years depending on the severity of the crime.
So, what can you do?
Be vigilant. Be on the lookout for signs of counterfeited products or websites and spread awareness about the damaging effects of counterfeit goods.