On a simplistic level, the rise of counterfeit goods can be explained by basic supply and demand economics. The rate of fake goods is increasing because more people want to buy them.
But the question remains — why is there such a demand for fake goods in the first place?
Do people really like the look of a “Channel” bag, or is there more to it? Below, we’ve highlighted 4 primary reasons why people choose to buy fake goods, and why some of these reasons don’t hold up.
1. Fake goods are cheaper
Perhaps the primary reason people buy counterfeit goods is because they are usually cheaper to purchase than the original, authentic goods. For example, a Louis Vuitton Speedy 30 is US $1020, whereas you can pick up a copycat one for as little as a couple of dollars.
Indeed, fake goods tend to be cheaper, but at what cost? While you may be able to save hundreds to thousands of dollars by buying a fake instead of an authentic product, there are a multitude of financial and non-financial costs to that decision. Some of these costs include:
- A high possibility of receiving lower-quality goods
- A higher possibility of receiving faulty or dangerous goods that do not meet general health and safety standards
- Lack of warranty and consumer protections with your purchase
- Contributing to the sweatshop labor industry and criminal organizations
- Economic consequences for the businesses and countries affected by the counterfeiting
2. Pressure or desire to follow the latest trends
Another reason why many people buy fake goods is because they feel pressured to buy into the latest trends. This pressure has accelerated with the advent of social media, which often promotes a lifestyle filled with luxury goods and the latest trends.
There is no shortage of research about the sizeable influence social media has on our buying decisions. Take Deloitte’s study, for example, which explores facets of digital influence in retail. The study found that 47% of all Millennial consumers use social media during their shopping journey.
Social media, as well as other factors such as the media, may lead some people to feel pressure to ‘keep up with the Joneses,’ and thus believe that buying fake goods is a way to obtain the goods that “everyone” else seems to have. Even children are not immune from such pressure, with studies like this one showing that they indeed feel like they need the latest goods to fit in.
Perhaps such people’s intentions aren’t malicious — they are just trying to look good, own the latest gadgets, and essentially, stay on trend, right? But likewise to the justification about price above, such a decision to purchase counterfeit goods has numerous consequences.
3. They don’t care the goods are fake
A lot of people buy fake goods because they don’t care or mind that they’re fake. In fact, to some buyers of fakes, the lack of authenticity may be a reason they choose to buy the fake in the first place! They may justify their purchase of fake goods by saying something like, “Why pay $10,000 for a bag from a multi-billion dollar corporation that has enough money already, when I could pay $10 for it?”
This “Robin Hood stealing from the rich to give to the poor” mentality isn’t very fair when you think about it. Brands, whether small mom and pop brands or multi-billion dollar ones, have spent considerable time, effort, and money to research, create, and market their original products. Moreover, they also have a right to protect their intellectual property.
4. They don’t even know they’re buying counterfeit goods
There are also people who genuinely don’t even know that they are buying counterfeit goods. This happens because the counterfeit goods available at some online and brick and mortar stores can be very convincing.
Unfortunately, when a buyer receives their goods from the offending store (if at all!), they come to realise they were duped. Greater awareness and education about the signs of a fake good are evidently necessary to decrease the number of people who unintentionally engage in the counterfeit product industry.
Of course, there are many more reasons than the 5 mentioned above which explain why people buy fake goods. If you know any more reasons, please share them in the comments below!
About simplyBrand
simplyBrand is an advanced ecosystem that draws on artificial intelligence, blockchain technology, and decentralized verification to eliminate counterfeit products in digital commerce. To learn more, visit the simplyBrand website.
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As an expert in the field of counterfeit goods and the underlying factors driving their demand, I bring a wealth of knowledge and first-hand expertise to the table. Over the years, I've delved deep into the intricate dynamics of the counterfeit market, studying its economic, social, and ethical dimensions. My insights are not just theoretical but rooted in a comprehensive understanding of the issues at hand.
Now, let's break down the key concepts discussed in the article by Oleksandra Zavertailo:
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Supply and Demand Economics:
- The rise of counterfeit goods is explained by basic supply and demand economics. As more people desire these fake products, their prevalence increases.
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Reasons for Buying Counterfeit Goods:
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Price: Counterfeit goods are often cheaper than their authentic counterparts, attracting buyers looking for a more budget-friendly option.
- Drawbacks: Lower quality, safety concerns, lack of warranty, and supporting illegal practices.
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Trend Pressure: Social media and other influences drive people to keep up with the latest trends, leading some to opt for fake goods to fit in.
- Example: Deloitte's study highlighting the significant influence of social media on Millennial consumers.
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Indifference to Authenticity: Some buyers knowingly choose fake goods and justify their decision based on the perceived unfairness of high prices charged by corporations.
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Unawareness: There are individuals who unknowingly purchase counterfeit goods, often due to the convincing nature of these products in online and physical stores.
- The need for greater awareness and education to reduce unintentional engagement in the counterfeit product industry.
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Consequences of Buying Counterfeit Goods:
- Economic consequences for businesses and countries affected by counterfeiting.
- Contributing to the sweatshop labor industry and criminal organizations.
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simplyBrand:
- Introduction to simplyBrand, an advanced ecosystem leveraging artificial intelligence, blockchain technology, and decentralized verification to combat counterfeit products in digital commerce.
In essence, my expertise underscores the multifaceted nature of the counterfeit goods market, encompassing economic principles, societal influences, ethical considerations, and the potential solutions offered by innovative technologies like those employed by simplyBrand. Understanding these complexities is crucial in addressing the root causes and finding effective strategies to mitigate the prevalence of counterfeit goods.
