Counterfeit Branding - Representing True Globalisation!

Home
>
Branding
>
Counterfeit Branding - Representing True Globalisation!

Counterfeit Branding - Representing True Globalisation!

From cigarettes to fashion accessories to food products to medicines, more than 50% of the global market are filled with counterfeited products. Do you realise that the Nike t-shirt that you are probably wearing right now may not even exist in the design portfolio of Nike Inc. It may have been produced by a small time designer who sits in the busy lanes of New Delhi in India and charges less than $1 to give you the swoosh in any colour, any form and any design as requested! A true form of 'customisation'.

Counterfeit branding in one way is the smartest way of doing business in the 21st century. Think about it. Large global corporations spend millions of dollars developing a brand and once the brand becomes popular, millions of businessmen on the other side of the world start thinking about the strategy to increase their product lines! In other words, people running the counterfeit market seem much more smarter than an investment banker. They do their business at the cost of large corporations.

Only in India, the "fakes" market is estimated to be worth more than $2 billion and it's growing by nearly 20% every year. With the weak execution of Intellectual Property Rights and the growing corruption, there is no doubt that very soon one may find himself driving a counterfeited car! If you think it won't happen to you, think again. There are nearly 128 'known versions' of Parachute Hair Oil, 113 of Fair & Lovely cream, 44 of Vicks VapoRub, and 38 of Clinic Plus Shampoo. The reasons they are so popular with counterfeiters is because they are money-spinning brands with wide appeal, easily reproduced and sold in the Indian market. The problem is manifest across all product categories throughout the country - medicines, FMCG products, cosmetics, foodstuffs, aerated soft drinks, liquor, watches, clothes and even currency . Consumers are often unaware that they buy products that resemble what they want. This is worrying companies because fake products often ride on the success of the original product, eating into sales, and, in some cases, harming the consumer. For counterfeiters, it is the easiest thing. Put a passable product into a tube, with markings that resemble the original and market it in rural, semi-urban areas, through promoters, agents and retailers willing to make a quick buck. For most, the con job is easy to carry through.

Consider the figures. Counterfeit products comprise $200 billion a year. Ironically, it is even endemic in countries such as China, which is known for flooding the world market with low-cost priced products. In China, losses from counterfeiting are estimated at approximately 20 per cent of total sales revenues for MNCs such as Procter & Gamble ($150 million), Nike ($70 million), Unilever ($24 million), Gillette ($20 million), Johnson & Johnson ($15 million) and $6 million for BestFoods. Most of the products copied are top-selling brands and consumers could be seriously affected while consuming low quality adulterated products, particularly in the food and drug categories. These are usually manufactured under unhygienic conditions and without proper technical supervision. According to a study conducted by AC Nielsen in India on 30 FMCG companies, eight out of every ten consumers who purchased pass-off products felt cheated and only knew after purchase that the product was a pass-off. Surprisingly, 42 per cent of all the consumers surveyed were aware of the existence of pass-off brands in the market and either saw them in shops, read about them in newspapers or saw them on TV. Though brands such as Pepsi and Coke in India have dropped prices substantially to make their products the flavour of the masses, spurious products still score because of poor consumer awareness. And fake product manufacturers reap windfalls because there are barely any input costs, no safety standards involved, excise or taxes paid.

It takes more than the vigilance of a trademark team to combat smart counterfeiters. Unfortunately, say sources, the cost of the battle is to be borne totally by such companies. According to one source, adopting tamper-proof packaging and hologramming practices are prohibitive exercises that will raise prices and repel the cost-sensitive Indian buyer. Hologramming can cost between $500,000 and $5 million! Ironically, higher prices can push customers to switch product loyalties better than the best ad campaigns. Despite the seriousness, almost all the companies are vague about the methods to educate consumers. They are shying away from aggressive methods, mainly because the Indian consumers' tendency has been to totally avoid the imitated product rather than determine whether it is authentic

SOMETHING TO SPICE YOU UP FURTHER

According to the Web site of De La Rue, a UK-based commercial security printer and papermaker involved in the production of over 150 national currencies and a wide range of security documents:

·Ten per cent of perfumes and cosmetics and 11 per cent of clothing and footwear bought by consumers are fakes.

·There are around 160 Web sites offering `genuine' Chanel products, despite the fact that Chanel doesn't sell any of its products on the Net.

·The US FDA recalled $7 million worth of intra-aortic pumps used during open-heart surgery after it discovered malfunctioning counterfeit parts in the devices.

·Counterfeit baby formula resulted in some babies developing rashes and seizures after imbibing.

·US investigators discovered that more than 600 helicopters sold to US civilians and NATO were equipped with counterfeit parts.

·Fake perfumes have been found to contain urine as a stabiliser.

·Each year in the UK, it is estimated that 4,100 jobs are lost because of counterfeiting - wrecking industries and draining funds which otherwise would have reached public services.

Although the whole issue may first appear to be a simple yet rampant case of copycatting, in fact it demonstrates that there is a real need for stricter protection laws of brands, enforcement of those laws, and harsher punishments for merchants and makers of counterfeit goods. But as far as knocking out counterfeiting completely is concerned, it'll never be gone and brands need to view counterfeit products just like any other competition. Indeed "Counterfeiting will always exist. It's the subculture of the business industry in the 21st century."

Gaurav Bahirvani Brand Development & PR Strategist. England, UK.

* Special thanks to Hindu Business Line.

In The News:

Yahoo! News: Top Stories

Finger-pointing begins as Senate nixes auto vote (AP)

AP - A Democratic Congress, unwilling or unable to approve a $25 billion bailout for Detroit's Big Three, appears ready to punt the automakers' fate to a lame-duck Republican president.

Fed sees economic woes persisting into next year (AP)

AP - Pounded by a fierce financial crisis, the country is sinking deeper into economic despair and is likely to be in the hole well into next year, forcing more Americans into the ranks of the unemployed.

Calif. Supreme Court to take up gay marriage ban (AP)

AP - California's highest court agreed Wednesday to hear several legal challenges to the state's new ban on same-sex marriage but refused to allow gay couples to resume marrying before it rules.

President-elect promised change, picking insiders (AP)

AP - President-elect Barack Obama promised the voters change but has started his Cabinet selection process by naming several Washington insiders to top posts.

Bush set to relax endangered species rules (AP)

AP - Animals and plants in danger of becoming extinct could lose the protection of government experts who make sure that dams, highways and other projects don't pose a threat, under regulations the Bush administration is set to put in place before President-elect Obama can reverse them.

Arraignment set for Cheney, Gonzales in Texas (AP)

AP - A Texas judge has set a Friday arraignment for Vice President Dick Cheney, former U.S. Attorney General Alberto Gonzales and others named in indictments accusing them of responsibility for prisoner abuse in a federal detention center.

Astronauts vow remaining tool bag won't drift away (AP)

AP - Astronauts vowed to double-check, even triple-check, to make sure a bag of tools is properly tied down during a spacewalk Thursday so it doesn't float away like one did earlier this week.

Herod may have been buried among lavish artwork (AP)

AP - King Herod may have been buried in a crypt with lavish Roman-style wall paintings of a kind previously unseen in the Middle East, Israeli archaeologists said Wednesday. The scientists found such paintings and signs of a regal two-story mausoleum, bolstering their conviction that the ancient Jewish monarch was buried there.

Publicist: Paris Hilton and Benji Madden split (AP)

AP - Paris Hilton and her boyfriend of nine months, Benji Madden, have broken up.

Terry leads Mavericks to 96-86 win over Rockets (AP)

AP - The Dallas Mavericks didn't need Josh Howard as much as the Houston Rockets missed Yao Ming on Wednesday night.

Global stocks hit 5-1/2 year lows (Reuters)

Reuters - A 6 percent fall in Asia pushed world stocks to their lowest in 5- years on Thursday, while oil fell below $53 and safe havens such as the yen gained on fears the global recession and a financial crisis will get uglier.

Weak Japan exports pile on economic gloom (Reuters)

Reuters - Japan's exports to Asia fell in October for the first time since 2002, showing that the fallout from the credit crisis has spread to neighbors such as China and adding momentum to investors' flight to the safety of cash.

Prospect for auto bailout dims as Senate races clock (Reuters)

Reuters - Chances dimmed that a last-minute plan being crafted by Republican senators, with White House support, to provide $25 billion to bail out U.S. automakers would receive enough backing from Democrats to pass before the end of this week.

Financials need at least $1 trillion: analyst (Reuters)

Reuters - The U.S. financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.

Obama taps Arizona governor for homeland security: report (Reuters)

Reuters - U.S. President-elect Barack Obama's top choice to lead the U.S. Department of Homeland Security is Arizona Gov. Janet Napolitano, CNN reported on Wednesday, citing multiple sources.

Oil falls more than $1 as crisis crimps growth (Reuters)

Reuters - Oil fell for a fifth straight session to approach $50 a barrel on Thursday as the fallout from the credit crisis hits the global economy, crimping demand for fuel.

Small businesses feel Wall Street's pain (Reuters)

Reuters - Wall Street's pain is rippling through U.S. small businesses, as bankers who once pulled in million-dollar bonuses lose their jobs and cut back spending on everything from parties to home improvements.

California court to hear gay marriage ban case (Reuters)

Reuters - California's Supreme Court on Wednesday agreed to hear a legal challenge against the state's voter-approved ban on gay marriage and let the ban stand in the meantime.

Asian markets slide as economic gloom deepens (AFP)

AFP - Asian stocks tumbled Thursday as global economic gloom deepened following a plunge in Japanese exports and a warning from the Federal Reserve that the United States could be in recession next year.

Russia to send more warships to battle Somali pirates (AFP)

AFP - Russia announced Thursday it would send more warships to combat piracy in the waters around Somalia, as the Saudi owners of the Sirius Star negotiated with the pirates holding their oil tanker.

Counterfeit Branding - Representing True Globalisation!

Branding Branding