Counterfeit clothing a growing problem
Demand for fake fashion continues to grow at an alarming rate according to a new report from just-style, with captured shipments indicating that around 20% of all athletic merchandise is fake. Despite heightened anti-counterfeiting measures, Canadian and US authorities expect counterfeiting to remain high for the next six years.
Between 2005 and 2007, counterfeiting grew at 6.6%, according to a new report from just-style - which is more than double the pace of total apparel market growth.
The 'Global market review of counterfeit apparel - forecasts to 2014,' says athletic apparel was the most affected, with captured shipments indicating that around 20% of all merchandise in this sector, which is typically sold in North America, is fake.
Despite heightened anti-counterfeiting measures, even Canadian and US authorities expect counterfeiting to remain high for the next six years.
In fact, industry analysts expect the proportion of counterfeiting in certain sectors to roughly double in the 2005-2014 period.
Many buyers are so eager to wear merchandise they have seem on celebrities that they overlook the implications of buying fake goods.
These include inferior design, the cost to legitimate business, health risks from hazardous dyes and chemicals, and supporting organised crime.
While it is not illegal to buy counterfeit merchandise in many countries (France and Italy excluded), it is illegal to manufacture such items, as they breech intellectual property rights, patents, trademarks and other copyright laws globally.
According to the International Chamber of Commerce in Geneva (CICG) the total cost of goods counterfeiting worldwide is approximately US$650bn a year, a figure that is steadily increasing.
Probably the greatest concern attributed to counterfeit apparel is its association with criminal activity.
Often counterfeit products fund criminal organisations and have been linked with gang and organised crime syndicates worldwide. Furthermore, it is believed that terrorism and terrorist groups may also fund their activities from the sale of counterfeit goods.
The economic losses of counterfeiting are well documented.
In 2002, 18% (US$17.64m) of the US$98m of counterfeit products seized by US Customs were fashion related items. However, this figure had risen to US$42m by 2007.
The Department of Homeland Security seized US$155m worth of counterfeit merchandise in 2006, an 83% rise on previous years.
The goods included: 77 containers of Nike Air Jordan shoes; counterfeit designer products that resembled Prada and Reebok merchandise; a container of Abercrombie & Fitch clothing; and 42,900 articles of sporting goods and apparel.
China remains the main source of counterfeit goods production in terms of overall quantities seized, with approximately 80% of all counterfeit articles coming from this country in 2007.
However, of the number of cases customs seized in 2006 and 2007, India, United Arab Emirates, Turkey, Algeria and Egypt were also prominent.
Of the total value of counterfeit merchandise seized around the world, 63% related to the textile sector, with over 10% of counterfeit items detained.
Both counterfeiters and customs officials are constantly evolving tactics to stem the counterfeit tide.
Customs officials are detecting a higher proportion of counterfeit cargo, while the fakers are sending larger quantities of shipments with lower value in an attempt to overwhelm effective enforcement.
For example, EU Customs seized 26,000 counterfeit apparel shipments in 2006. In 2007, they seized 37,000 - an increase of almost 30%. The total value of apprehended goods, however, increased only 13%.
One surprising fact is that many buyers of authentic products have also purchased counterfeit, and vice versa.
And alarmingly, counterfeit buyers are actually spending more than the genuine product buyers because they are purchasing more.
The World Intellectual Property Organization (WIPO) estimates that approximately 64% of counterfeit consumers have also purchased an authentic product, compared to 42% of genuine brand purchasers.
Therefore the greatest problem that companies and countries have to overcome, in relation to counterfeiting, is raising public awareness and understanding to a level where they feel that the crime is no longer ethical, and do not continue to support its growth.
Technology is making it easier for anti-counterfeiting efforts, with businesses recording their trademarks, products and labels on global databases that are connected directly to other industries and governments.
This provides legitimate manufacturers with a means of registering their brand name globally so that it may possibly reduce counterfeiting efforts. For example, transactions and purchase orders are often recorded even during counterfeit sales.
Law enforcement agencies and legal firms often use such data to track suspected counterfeiting networks and operations.
Other initiatives to make it easier to distinguish genuine items from fakes include the use of holograms and other hard-to-copy trademarks, heat transfer labels, invisible inks, unique thread and merchandise-tracking technology.
However, the just-style report notes that the invention of new anti-counterfeiting devices is ineffective if companies cannot control their labelling supply and monitor application stringently.
And it's doubtful the crime will be completely eradicated since counterfeiters, like manufacturers, are continually learning new and advanced techniques, and the possibility of earning copious amount of money is an extremely strong motivator.
Follow this link for more information on the 'Global market review of counterfeit apparel - forecasts to 2014.'
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