Business | Investment
Cold truth of the copycat culture
A recent KPMG study says the total value of counterfeits in the UAE and the resultant loss in revenues for traders in 2006 is estimated to be between $670 million and $696 million.
- By Ceofe Maceda, Staff Reporter
- Published: 00:19 January 26, 2008
You pay your money and you take your choice. It's an old adage and it's true. Very often the onus is on the individual to decide between the options available.
As a consumer, the rider has to be: if you know what you're buying.
A recent KPMG study commissioned by the Brand Owners Protection Group says the total value of counterfeits in the UAE and the resultant loss in revenues for traders in 2006 is estimated to be between $670 million and $696 million.
According to the Organisation for Economic Cooperation and Development, trade in fake and pirated goods across the globe may have totalled around $200 billion in 2005, as counterfeits are being produced and consumed in most economies, particularly Asia and China, considered to be the largest source of production.
The most common argument advocated by protectionists is that counterfeiting hurts the "overall economy." Legitimate brand owners suffer from reduced sales and profits, while governments miss out on crucial tax revenues or additional income that could increase their gross domestic products.
There are some gray areas in the use of the word counterfeit. A product should only be considered counterfeit when it is made with the intent to deceive the buyer.
It could be cigarettes, cosmetics, perfumes or jewellery that are supposedly manufactured by a famous brand - all of which are designed to mislead the consumer about their identities, contents or origins. These items command almost the same price as the original since the consumer thinks they are genuine. In this case, the victim is the buyer.
However, there are items out there that are priced way cheaper than the original. They also bear the trademarks of popular brands, but they cost just a snip of the price of the patented version. I call them cheap knock-offs or unauthorised copies.
These are the kinds of goods that thrive in most places, including Dubai. If you descend on Karama, Deira or Satwa it is easy to spot them. They could be clothes, shoes, handbags or everyday items that flash the trademarks of popular brands like the interlocking L and V of Louis Vuitton or the equally popular Burberry. They thrive because many consumers patronise them to save money. No one drags those people to the flea market. People go there deliberately to buy knock-offs. They know that what they're buying is made from the cheapest materials. But they don't care. They can't afford to buy the genuine luxury brand anyway. In fact, they have the advantage that they're only spending a few bucks for something that carries the preferred logo.
Hence, there is actually no real incentive for consumers to join the bandwagon of anti-counterfeit lobbyists. In reality, brand owners - the victims, with exclusive rights over the sale of the copied items - need to give a stronger reason to convince consumers to stop knowingly buying unauthorised copies of their products.
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