From tourists flocking to NYC for a bargain-basement Birkin, or to Indonesia for a knock-off Fendi Baguette, the case of fake designer goods is on the rise – and it’s an issue for luxury brands.
Counterfeit bags have been circling the fashion industry for decades. In a nearly 20-year-old episode of Sex and the City, Carrie and Samantha make their way to a car boot to purchase a fake Fendi Baguette. Although they don’t take the bait, it rose the issue behind selling counterfeit goods.
Online marketplaces such as AliExpress and Wish are no strangers to showcasing their seller’s ‘replica’ designer goods – from bags to shoes, they’ve got them all. Although it’s not advertised, it’s not exactly hidden, either. In a quick Google search, 83 million results show the ways to purchase a fake designer bag on the marketplaces, including how to spot a fake one from something authentic.
What is a Counterfeit, and Why Do People Want One?
It’s understandable why customers choose to purchase a replica of their favourite bags. They’re markedly cheaper and sometimes act as a ‘tester’ to see if the customer wants to spend their money on the real thing. For example, a Birkin bag by Hermes, named after the French model, singer and icon Jane Birkin, can sell anywhere from $11k to $300k. On the other hand, you can buy a counterfeit bag for a cool $45 online. These goods also look almost identical to the ones they’re copying, so only a designer aficionado cold spot the difference. However, the damage that these items do to the designer label industry is dangerous.
How can you tell whether someone’s item is a knock-off? First, there’s a difference between a counterfeit and a knock-off. The latter stick to the original design, with a few minor adjustments to avoid copyright infringement. These are ‘inspired’ by the original goods, and although still an issue, they’re technically not as bad as a counterfeit. The former often features material that’s almost identical to the original, with precise detailing such as Dior engraved on the zip, a tag stitched inside and comes with a duster bag for protection. This is a counterfeit and is set to deceive the onlooker for the real thing. Of course, many know that they’re buying a fake, but some pay top dollar for an item they’re lead to believe is the real deal. “Fashion is a complex market and counterfeit fashion is just as complex,” explained David Wall, Professor of Criminology at Leeds University.
Second, although the dupes are remarkably comparable, there are slight differences that the naked eye can pick up on. For instance, the overall quality of a counterfeit bag is slightly worse than the original – the stitching may be unfinished, hot glue sits on the edges of the bag or there’s a faint smell that needs to be aired out before wear. There are other, more significant, faults that tip off the authenticity of the goods – misspelled labels, altered logos and awkwardly re-drawn patterns. Instagram account Diet Prada made headlines in 2017 when an Australian fashion rental company, Borrow My Balmain, was caught purchasing fake designer dresses from eBay and making a hefty profit. The Instagram account released images of an influencer with a counterfeit Dior dress from the rental company, which was marked with a ‘hilariously bad’ pattern on the skirt. Although it was a funny mistake for the onlookers, it shed a light on the counterfeit issue facing many designers in the world. Borrow My Balmain is no longer in operation.
So, What’s the Issue?
Sure, luxury goods can be expensive, sometimes to an overwhelming and somewhat facetious manner – but that’s how it got its name. Not everyone can afford to pop $3k on a Louis Vuitton Noé bag; it wouldn’t be luxury if anyone could drop by Hermès after work and walk out with a dozen scarves. Behind the hefty price tag is a myriad of designers, manufacturer, marketers, retail stores and everyone in between.
For a $1,000 bag, (which in today’s market, would be a small purse big enough to hold a few credit cards and notes), approximately $45 of the cost goes to its material (typically Italian leather), $110 goes to the craftsmanship, $200 is handed to the marketing team, and the remaining $645 is profit. However, luxury brands lose a hefty sum thanks to the budget-friendly counterfeit items. It’s not just bags, either – T-shirts, shoes, accessories and even cosmetics all fall prey to the imitation game.
Last week the handbag label, Coach, announced its partnership with Tmall for the third time since 2011. Tmall is an online Chinese B2C platform, operated by the Alibaba Group, who also own AliExpress. The pair have faced a complicated relationship since its initial launch, due to a disagreement regarding the way Alibaba and its subsidiaries deal with counterfeit goods. In 2016, Coach declared it would only sell goods from its official site and via WeChat, a Chinese social media app that doubles as a marketplace for retailers. In a statement, the American label said would no longer sell on Alibaba’s sites until it “[adjusted] its operational strategy”. This move was a risky one, as the bag company received an uplift in sales and a 15 per cent growth year on year with its collaboration with the Chinese marketplace. It has since re-signed with the marketplace and will enter Tmall for the third time in September.
At this current time, the trade for fake goods as a whole sits at $4.5 trillion worldwide, of which counterfeit luxury goods account for 60 to 70 per cent. Aside from it being a huge chunk of retail spend, this amount is lifted straight of the pockets of the original designers, manufacturers and marketers who originally pieced the items together. According to the Global Brand Counterfeiting Report 2018, the estimated loss due to global counterfeit purchases was $476 billion in 2017 and is on the rise.
Another issue that the industry faces is that of copyright. “I’m not condoning counterfeiting,” Professor Wall explained. “It’s just that it shouldn’t be a police issue. It’s a civil issue. And the same goes for people stealing a design, or a logo. After all, we buy fake items for different reasons. Many of us indulge in ironic consumption – such as a Breitling watch for a dollar. It’s clear it’s not real, it’s just quite amusing. The real issue is when people think they’re getting the real thing and they’re not. Those people need to be protected. But the vast majority of consumers know exactly what they’re getting.”
Can you spot the difference? Source: The Sun
Brand such as Gucci and Off-White have made a conscious effort to reduce the number of counterfeit products selling. The former sell T-shirts with the logo plastered across the chest for $300, which is still pricey, but it allows customers from many socio-economic backgrounds the opportunity to own something luxurious. In 2017, the Italian fashion house hilariously released a line of bags, shirts and other goods with the name misspelled as Guccy, as a tongue-in-cheek reference to its counterfeit cousins. Off-White sells its vibrant yellow belts for $200, and its smaller goods like shoelaces and bracelets for even less, all with the iconic branding that people have come to love and wear with anything they please. Off-White has faced copyright issues with other designers ‘ripping off’ its signature styles (including a zip-tie). These steps may be small, and overall still a costly accessory for a customer to own, but the most important thing is that they’re customers.
While some argue that the counterfeit items raise awareness and act as branding for the real thing, it doesn’t change the economic loss that these brands are facing. It looks like the counterfeit bags, skirts, cosmetics and everything in between isn’t going anywhere any time soon, so luxury brands have to think fast to keep themselves relevant and invent new ways to keep profits up, even if it means better access to its consumers.
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