Counterfeit goods

Counterfeit items are inferior-quality imitations that are illegal replicas of the original commodity. They frequently have forged corporate names and trademarks and can include poisonous elements such as lead. Products made and sold by counterfeiters are often of poor quality and pose health and safety risks. This strategy threatens creativity, which is critical to economic development. The effects of counterfeiting are more severe in developed countries, where infringement practices are more prevalent due to lax compliance (Stroppa and Stefano 20). Criminal networks gain financially in such marketplace while the environment is negatively affected. Foreign direct investment may be lower, and trade structure may be modified. Counterfeit goods impose adverse effects on the economy of a country which hinders its development.

There is a wide range of counterfeit goods including clothes, shoes and handbags. Such products are illegal as they confuse customers. Sellers of such goods infringe on the trademark or copyright of the brand owner. There are deceptive and non-deceptive purchases of counterfeit goods. The consumer may buy such a product not knowing that it’s not original and others may buy with the knowledge that it’s a fake good. Counterfeit goods affect the economy of a country in many ways. This paper focuses on the counterfeit products, giving an emphasis specifically on clothes, shoes and the bags.

Counterfeit Clothes, Shoes and Handbags

Counterfeiting has affected almost a lot products in within the human life. The counterfeiting of clothes extends to the knowledge built up in the manufacturing industry over time. This knowledge is characterized by factors such as quality, respect for the environment and protection of consumer health and safety. Many of the consumers don’t want to know whether a garment is original or fake, what’s essential is buying something from a famous designer (Hieke 160). Having paid much less for it than the original gives them even more satisfaction.

Counterfeit clothes can be harmful to the consumers. The use of dangerous substances in the clothing is high because over time the chemicals are gradually absorbed by the skin. Hazardous substances used by the textile industry include detergents, colourings and fixing agents which leave traces in clothes. When these elements contact the surface, they are absorbed and metabolized causing an allergic action such as dermatitis. Imitation of goods such as clothes create unfair competition and inflicts damage to research development and innovation capacity.

Also, the footwear sector is among the most affected by illegal trade. When consumers buy shoes, they are attracted by the model, colour and the price, but low cost does not guarantee originality. Counterfeiting of shoes is not always blatant. It can be sold in markets outside regular distribution such as stalls in shops or via the internet. In footwear sector, counterfeiting constitutes theft in the value of their brand, reputation, research and creativity. Such attributes are important to the success of a product. Alongside the health risk to the consumer, it has an impact on economic development, development, and tax evasion and social security contributions. These things are critical to the economy.

Additionally, the counterfeiting of handbags has become common in many countries all over the world. This illegal activity leads to the production of low-quality handbags which are of poor quality and low durability. Many consumers find it hard to distinguish between the genuine ones and counterfeit. The price factor has been one of the key aspects that have attracted many people to buy the fake handbags (Kapferer and Bastien 312). Therefore, the counterfeiting of the bags has been felt significantly.

Why People Buy Counterfeit Goods

There are two types of counterfeit consumer counterfeit purchases, and the deceptive counterfeiting occurs when the consumer does not know that they have purchased a fake, and the non-deceptive take place when the consumer buys a fake knowingly. However, many reasons make the customers buy the products either as deceptive or non-deceptive. Firstly, it is true that people who do not regard the law will be more likely to purchase these products. Lack of knowledge about the prevailing counterfeit laws has made many people to be found in the trap of buying the counterfeits. They do not know the repercussions of using such products; a factor that has a significant impact on the purchase of the fake products (Husic and Cicic 231).

Secondly, the pricing has also made many people buy counterfeit products. In most cases, people feel overcharged while purchasing original goods, yet they can find a similar substitute for the fake products. Pricing has made some consumers develop negative attitudes towards the big companies that produce original products. Counterfeits can also appeal to people who want to have a particular good but do not have money to buy the genuine product. The forgeries have produced the clothes, shoes and the handbags that attract many consumers through their feature. For example, fake shoes have beautiful designs and looks which draw customers from a distance. In some cases, the counterfeit products are readily available, have filled the marketplace, and even finding the original products is difficult in some places. Therefore, such scenarios have significantly contributed to the purchase of the fake products in the market.

Also, some other people buy both the original and fake product to carry out experiments on the usefulness of the products. In such cases, the consumer knows that they are going for the forgeries, yet they make non-deceptive purchases. Usually, they have to compare the tests or the value that comes out of the two products, which may guide them to stick on a given product. Therefore, after their experiment, some may continue buying the counterfeits.

Besides, the counterfeit brands are popular because people are unable to distinguish them from the originals. Another prominent factor motivating customers to buy these goods is their relatively low prices. Some people who have previously purchased counterfeit goods believe that they are as good as genuine products, that’s why they do it repeatedly. Additionally, the social pressure needs to stroke one’s ego, and low prices are some of the reasons why people buy these goods.

How Counterfeit Goods Affects the Economy

According to research, industries worldwide lose billions of money every year to counterfeiters. The loss causes great impact on victim countries economy. There is an experienced loss of sales to sectors which have direct competition with counterfeit industries. Some markets are dominated by counterfeiters, creating barriers to entry of the genuine producers. The right owner does costly investigations when combating counterfeiters and uses a lot of money. These activities span across departments such as marketing, human resource, product development and legal departments (Share and share alike 20). Such scenarios cause losses to the economy because of the lots of money used.

Also, it is clear that the legal department of the country or that of the organization affected suffers financial losses from counterfeiting. The section is forced to enact laws that enhance the control of the fake products among the consumers and their respective producers. The process is cost intensive and presents unnecessary liabilities to the nation or a given country. Such cases have a direct impact on the economy of a given nation.

Besides, the victim countries suffer tangible and intangible loss. Foreign producers become reluctant in importing their goods, and the nation loses foreign investment. There occur job losses and loss of foreign exchange in countries where counterfeiting is rife. Extreme levels of copying may make the companies that produce the original products to close up which makes the employees lose their jobs among other adverse impacts. Therefore, counterfeiting has a negative impact on the victim organizations and the nation in general and hinders the economic growth (European Commission 2007).

Additionally, the counterfeiters discourage inventiveness in that country, thus hindering market development. The presence of the fake shoes, clothes and the handbags, makes the people relax and become less creative. They are comfortable with the prices and makes them lack driving factors towards invention. The government in such countries lose tax because the counterfeiters are not keen to pay tax on their ill-gotten gains. Companies and nations gain a competitive advantage in the market by employing the creativity and innovation. Therefore, when the institution lacks to embrace these driving factors, it creates some negative impacts. A country’s economy deteriorates due to these activities.

Conclusion

Counterfeit goods are fake consumer goods produced which very much look like the original product. This practice hinders economic growth as it undermines innovation, cause loss of foreign investment and failures of government tax. Counterfeit goods exist in many areas such as clothes, shoes and handbags. The consumers purchase these products due to reasons such as the inability to distinguish them from originals and lower prices. As long as counterfeit goods exist, the economy deteriorates, and trade development is hindered.

Works Cited

European Commission. Summary of the Community Customs Activity on Counterfeit and the Piracy Brussels, European Commission, Taxation and the Customs Union, 2007, http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/coun terfeit_piracy/statistics2007.pdf Accessed 04 December 2017

Hieke Steri. “Effects of Counterfeits on Image of the Luxury Brands: An Empirical Study from the Customer Perspective” Journal of Brand Management, Vol. 18, Issue 2, 2010, pp. 159-173

Husic Melika & Civic Muris. “Luxury consumption factors”, Journal of Fashion Marketing and Management, Vol. 13, Issue 2, 2009, pp. 231-245

Kapferer Jean & Bastien Dragovich. “The specificity of the luxury management: Turning marketing upside down”, Journal of Brand Management, Vol. 16, 2009, pp. 311-322

Share and share alike. The challenges from the social media for intellectual property rights. UK Government: Intellectual Property Office. 2017. 99. 1-150.

Stroppa Nicholas., & Stefano Delle. Social media and the luxury goods counterfeit, a growing concern for government, industry and consumers worldwide, 2016, pp. 1-50