Fake Luxury Goods Shift into Social Acceptance; But Who Benefits?
Davenport Lyons' Counterfeiting Luxury: Exposing the Myths 2007 Report
Owning a counterfeit luxury product has become socially acceptable amongst UK consumers, but almost 80 per cent of consumers would be deterred if they knew that sales help to fund criminal activity.
Building on its pioneering 2006 Counterfeiting Luxury Report, our new research shows that almost two thirds of UK consumers, an increase of 20 per cent on 2006, are proud to tell their family and friends that they bought fake luxury clothing, footwear, watches or jewellery.
The second report, Counterfeiting Luxury: Exposing the Myths 2007, undertaken by Davenport Lyons through research agency Ledbury Research, also reveals that consumers are spending more on counterfeit goods. On average, shoppers have spent 10 per cent more on faked designer and luxury products than the previous year, bringing the average spend to £21.30 per person. More than 10 per cent of people paid more than £50 for a fake.
"The social acceptability of fake goods is a deeply concerning shift in consumer behaviour. Given the balance of findings in our 2007 Report, the time has come to tackle the UK demand for fakes head on," said Simon Tracey, Head of Intellectual Property & Brands at Davenport Lyons. Almost 71 per cent of consumers would be deterred from buying fakes if they thought it might result in a possible prison sentence (a remedy presently unavailable in the UK). But many believe such a crack down would be unenforceable with 68% of the population declaring that buying a fake should not be made illegal.
The research reveals that the most effective way of changing consumer behaviour towards fakes would be to highlight that the proceeds are going towards the funding of organised crime, including terrorism. Nearly 80 per cent of consumers said that they would be put off buying counterfeit goods if they knew the returns sometimes support criminal activities.
"This is sadly an issue with international ramifications and it is clear that the public needs to be made aware of whose pockets they are lining when they buy a fake. Interestingly, criminalising the purchase of counterfeit goods would not work as an isolated step in the short term. Unless consumers are made aware of the implications of buying fakes and the part the money they hand over can play in organised crime generally together with the specific threat to global security, matters can only get worse," said Tracey.
"Deterrent activity so far has understandably been mainly focused on revealing the extent of seizures of fake items by Customs and Trading Standards. However, this Report shows that approach has the least impact on fake buying patterns. Those efforts therefore need to be bolstered in the clearest of terms with specific data about where the proceeds of fakes go. Brands also need to distinguish clearly between the factories that make genuine items and those that churn out fakes. On any view, the current lack of consumer awareness needs addressing carefully in order to turn the tide against counterfeiting. Inevitably, this is a substantial challenge as prosecuting authorities will not wish to disclose evidence that could prejudice their ongoing criminal investigations. However, with full political support, much more data can and must be brought out into the public domain to drive down demand from, and thus stem the flow of fakes into, the UK. Consumers need to understand that by buying fakes, they aren't just getting a relative bargain; they are fanning the flames of a much deeper social problem - crime and criminality." Tracey continued.
The report found that the highest percentage of fakes were bought from UK market stalls. But as foreign travel becomes increasingly popular more counterfeits are being bought abroad this year. There is a marked increase, since last year, in the proportion buying whilst travelling in Europe (up 5 per cent to 45 per cent), India (up 7 per cent to 10 per cent), China (up 7 per cent to 8 per cent) and the rest of the Far East (up 7 per cent to 19 per cent). The Report findings also cast light on the proportion of UK consumers who have bought fakes on the Internet, with 29% having bought a fake from the online marketplace eBay (placing eBay as the third most likely source of fakes for UK consumers); in addition, those who bought a fake through eBay were twice as likely to agree that they had previously bought a fake thinking it was the real thing.
The quality of fakes is continually increasing. Nearly a third (31 per cent) of fake buyers bought a fake item believing it to be the real thing. Only 17 per cent of the population are confident they can tell the difference between a fake and a genuine luxury brand.
More than three million British adults (7 per cent of the population) bought fake luxury clothing, footwear, leather goods, watches or jewellery last year. One in 20 people (2.6 million) bought a fake from one of the top 10 luxury brands.
Designer brands are being critically damaged by fakes. As much as 55 per cent of the population think that luxury brands lose their exclusivity if fakes are widely available.
Last year's report revealed that fake-buyers were not necessarily low-income earners or unemployed and the situation is the same in 2007 with 20 per cent of fake-buyers from households earning over £50,000. Those who buy fake are ironically also more likely to buy a genuine designer item than those who do not buy fake; in addition, those who buy fake are spending more on luxury goods than non fake buyers. For example, fake-buyers spent 51% more on all types of leather goods (an increase of 9% on 2006), 20% more on watches, and 15 per cent more on clothing than those who don't buy fakes.
The study asked over 2,000 UK consumers their views on counterfeiting and copying brands and revealed the continuing popularity of fake luxury goods with Louis Vuitton, Gucci and Burberry identified as the most frequently faked labels.
To obtain a copy of the full report please click here.