How to reduce the risk of counterfeiting in the open market
According to a recent survey, the market value of counterfeit goods stands at $532.93 billion, with counterfeit pharmaceutical drugs holding the top position, followed by counterfeit electronics and web video piracy. In the United States alone counterfeiting is worth $225 billion. Let’s examine what keeps the counterfeit industry booming, what the risks of counterfeiting are and how to curb those risks.
Counterfeiting is a threat to trademarked products because it damages the reputation and consumer loyalty that the trademark owners took years to earn. From watches, auto parts, batteries, drugs, pirated movies, electronic goods, toys, designer clothes and pirated software to medicines, counterfeiters have made inroads into every segment of every industry. As counterfeit products have become a booming industry, the magnitude of losses experienced by legitimate companies in terms of revenue and credibility is way beyond what we can fathom.
Why is the counterfeit industry booming?
The credit for making counterfeiting such a booming industry goes to the consumers, the legitimate business owners, and the law enforcers.
Consumers: 80% of today’s consumers, from both the developed and developing world, purchase counterfeit and pirated products. The desire to own branded goods without shelling out a fortune motivates people to opt for fake products. These consumers are unaware of the potential risks involved when buying illegal products.
Legitimate business owners: To increase their margin of profit, companies shift their manufacturing operations to third world countries where labor laws and regulations are weak and inadequate. Usually those who manage businesses in third world countries are given freedom by their parent companies, with little or no monitoring of their activities. This leads to product counterfeiting. Moreover, to avoid issues, certain companies tolerate counterfeiting, leading to the mushrooming of this industry.
Law enforcers: Law enforcers who are entrusted with the duty of curbing these illegal activities often join hands with counterfeiters for personal gain. The loopholes within existing policies also make it easy for counterfeiters to get away with lighter punishments. Some government officers even own factories that produce fake products, thus adding to the woes.
Measures to reduce the risks of counterfeiting
Counterfeit activities can never be curbed unless and until the demand for fake products dies down. And this is possible if and only if consumers stop buying these products. Most consumers buy counterfeit goods unknowingly because they fail to distinguish real products from the fake ones. And those who buy fake goods knowingly, lured by the price range, are unaware of the health, legal, and safety risks associated with counterfeit goods. Therefore it is necessary that people be made aware of the consequences of buying counterfeit goods. More than getting on the wrong side of the law, it is the health and safety risks that need our attention. There are several instances where faulty auto parts, electronic goods or medicines have led to accidents and even death.
Legitimate business owners, on the other hand, must strictly ensure that no counterfeit parts or components are used anywhere in their supply chain. Serial numbers and holograms can also go a long way toward identifying fakes from originals.
Government officials need to come up with effective anti-counterfeiting strategies and policies to wipe out the menace of counterfeit products. They should implement harsher penalties, which would serve as a deterrent for those who indulge in these illegal activities.
Counterfeit products are slowly killing our economy and our society, which makes it imperative for consumers, legitimate business owners, and governments to take a strong stand against counterfeiters.
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