Is the thrill of buying counterfeits fueling the problem of IP abuse?

Stuart Fuller

Three years ago, consultancy firm PwC published a ground-breaking report into the attitudes of consumers towards counterfeit goods. It was the first survey for many years that focused on why people bought or consumed fake items; the results were both enlightening and worrying.

Although a significant number of all respondents admitted that counterfeiting was morally wrong, around half of those questioned had bought fake goods. When age was overlaid onto the results, the variance in responses was very marked – only 80% of 18-24-year-olds thought counterfeiting was wrong, whereas 94% of over-55-year-olds understood the issue.

The attitude of consumers towards the growing problem of counterfeiting is paramount. One of the biggest threats to brand holders is for the purchase of counterfeit goods to be viewed by consumers as the ‘the norm’.

So why do consumers buy them? The PwC report highlighted a number of reasons, not all of which are avoidable. Price is the overwhelming driver in the purchase of counterfeit goods − although 31% of the survey group were unaware that despite buying a cheaper item, it was actually counterfeit. This leads us into the realm of education as the main solution to this particular problem. A number of brands, such as Canon and Ugg, have specific consumer-education programs aimed at ensuring their customers understand how to recognize counterfeits. They also give them a mechanism to report any suspicious websites or items.

Meanwhile, 26% of respondents knowingly buy counterfeits because the genuine product is considered overpriced. Such behavior ignores the potential risks of using counterfeits, whether that’s down to the harmful ingredients or materials that are used in the production, little or no compliance with health and safety standards, or what the purchase ends up funding.

Some 25% are driven to buy counterfeits because they cannot afford the genuine item. The level of safety of taking such an approach will depend on the product – for instance, if someone cannot afford to buy genuine drugs or medicines, they’re exposing themselves to huge risks by buying counterfeit, where there will be no control on the active ingredients within the products. One of the most counterfeited product types is charging cables for smartphones and similar devices. Whilst they may be a fraction of the cost of the real deal, they will not on the most part have gone through the rigorous safety testing, which could lead to the products overheating, catching fire or even delivering potentially fatal electric shocks to the users.

Finally, there’s the group of individuals who are happy with the trade-off between price and quality, feeling that counterfeit items ‘do the job’. Although some of these purchases may simply be viewed in an economic theory sense as ‘substitute’ goods, again there are the same health and safety concerns about the items purchased.

All that said, could there be another reason why some consumers buy counterfeit? According to consumer behavioral expert Dr Xuemei Bian of the University of Kent, one of the reasons behind the growth in the problem of counterfeiting is the ‘thrill of the hunt’. Dr Bian looked at individuals who bought goods from Chinese marketplaces and found that some bought inferior, fake items, as if they were rebelling against the system, gaining satisfaction that they had knowingly bought an illegal item and not been caught. Going back to the PwC report, few of the respondents (just 16%) understood what the law was in terms of buying (or even selling) counterfeit items. Dr Bian summarized the findings of the survey in one paragraph:

“All of the respondents could readily account for their desire for luxury brands or could provide accounts of their associates’ preoccupations with such brands. This desire was thought to be a result of people feeling aspirational and social comparison pressures, which are common in rapidly developing economies.”

Whilst some of those who responded to Bian’s survey understood the damage that buying counterfeits caused both the brand holder and society as a whole − something borne out by the PwC study − the majority expressed little concern about the impact of their actions. A small percentage even felt that by buying counterfeit items they actually increased the perceived value of the brand.

Part of the reason for the growth in counterfeiting lies in the potential solution – if the risks of buying and using counterfeits aren’t fully understood, then people will not change their behaviors. Just as price only becomes an issue in the absence of value, risk only becomes a consideration when the pain is understood.