Counterfeiting is a hugely successful industry, especially nowadays where luxury seems almost absurdly unattainable for most mere mortals. And, even if this is a phenomenon that we can find in every sector, some of the most counterfeited industries are fashion and cosmetics.
It is believed that counterfeit fashion goods cost European brands the value of 9.7% of their total sales every year. This percentage has definitely been boosted by the arrival of the Internet and e-commerce owing to the anonymity it gives to fraudsters. However the phenomenon of counterfeiting is as old as couture itself. In the early 1900s, fashion forgers often sketched designs they saw in Paris shows and sold reproductions in France and overseas. By 1914, more than two million fake couture labels had been sewn into garments.
But, what does fashion have that makes it so attractive for counterfeiters? Well, firstly the fact that the fashion industry is dictated by ever changing trends; something that’s hot may be old fashioned tomorrow. As a result, fashion brands have to constantly reinvent themselves throwing different product out there trying to stay relevant. If we combine this with the image-based, shopping-savvy society that we live on, obsessed with trends but also with saving, where customers hunt for the perfect balance between trend and price we get the ideal breeding ground for counterfeiting.
What is the real impact of counterfeiting in fashion?
For some people, the fact that your designs are being imitated is seen as the ultimate sign of flattery, a way of determining the success of a fashion brand. What is more, there have been studies which conclude that counterfeits might actually be a good thing for the fashion industry, forcing brands to improve their products in order to set themselves apart from the copycats.
However, the majority of the industry is of the opinion that counterfeiting is theft and those who buy counterfeit product are responsible for fueling criminal activity. For Ashlee Froese, partner at Gilbert’s LLP, “Counterfeiting is stealing the greatest asset a designer has and that is creativity. That is their main asset, their main product.”
And stepping back from the intangible assets now, counterfeiting has an alarming economical impact in the fashion industry. According to a report published some months ago by Europe’s Office for Harmonization in the Internal Market (OHIM), the counterfeit of apparel and accessories cost European brands €26.3 billion yearly (that is, the 9.7% of their total sales). And, if we translate this into jobs, we learn that approximately 363.000 jobs have been lost across the retail, manufacturing and wholesale sectors of Europe’s fashion industries.
How to fight back?
Luxury brands have developed ways, often through the court systems, to fight against the development and retailing of counterfeit goods.
As we said at the beginning of the article, e-commerce has opened the doors to many new forms for the sale and distribution counterfeit goods which make it very easy for these fake products to reach the consumer. Mirror websites might be the most immediate danger for a brand because they principally attract “deceived consumers”, who believe they are buying a real product and expect the brand’s promise. In turn this can damage the brand’s reputation and decrease the number of loyal consumers the brand possesses. However, the proliferation of fake products in worldwide online marketplaces such as eBay, Amazon or Etsy or the Social Media Channels, is also the cause of many headaches for industry executives.
The proliferation of distribution channels makes the protection against this phenomenon difficult because it involves a continuous effort of brand monitorization. And this is why a strong brand reputation monitoring strategy implemented by experts is nowadays imperative in the fashion industry. We have already seen the economic impact fake goods can have on the profits of a brand, but we cannot forget that a trademark and brand’s reputation are what differentiates a fashion company from the rest. They are its greatest assets and should be protected at all costs.