Driving the Counterfeit Goods Market: Why Consumers Fake it?

Counterfeiting has become a significant economic phenomenon with research suggesting that counterfeit products sold across borders were worth £270bn in 2013. However, despite the fact that selling and manufacturing counterfeits are considered to be crimes in the UK, research suggests that about one-third of consumers would knowingly purchase counterfeit goods.

Still, even though demand is a key driver of the counterfeit goods market, academic literature has historically focused on supply. Bridging this gap, Kent Business School’s Dr Xuemei Bian has focussed much of her research on “why consumers knowingly buy counterfeits” and the creation of demand for inauthentic products that are often inferior in terms of quality and carry a performance risk.

So why do consumers buy fakes?

There is perhaps an instant assumption made that price is the primary driver of the counterfeit goods market. Counterfeits allow consumers to gain the status and quality of branded products (Grossman and Shapiro, 1988a)[1] without paying the original price tag.

Brand personality

In fact, contrary to anecdotal evidence, consumers do not buy counterfeit branded products (CBPs) predominantly because of their low prices. One of Dr Bian’s papers[2] instead suggests that perceived brand personality is the greatest or second greatest (after perceived image benefit) for CBP consideration. Luxury items in particular are being bought for what the items mean more than for what the items actually are. Dr Bian’s research insists that it’s important to view CBP products not only as a product when considering consumer purchasing intention, but to see the product as a brand – a counterfeit brand.

So what is brand personality and why does it have such an impact? Brand personality is something consumers associate with, it is essentially a way consumers can express themselves through association with a desired group or ideal self-image. This clearly translates to counterfeit products whereby the symbolic elements of the original brand are still somewhat transferred to the CBP. It bears a brand name of an original branded product and an association is made in terms of brand personality – even if research has so far not been able to ascertain how and to what extent this translation of brand personality has occurred.

The thrill of the chase

While it’s definitely easy to conclude that consumers buy CBPs as they associate the product with the original, there’s also another motivating factor at play – the thrill of the chase. In Dr Bian’s primary research studies, participants that knowingly purchased counterfeit products were not doing so out of financial necessity. Instead participants were actually living comfortably and participated in the purchase of CBPs as they enjoyed doing so. Consumers essentially enjoyed the deliberate risk associated with buying CBPs and the feeling of belonging to a “secret society.”

Interestingly, while studies Dr Bian conducted found that there was a tendency with consumers of a lower social status, to buy fewer visible fakes to avoid social embarrassment with their peers. There was equally an urge for these same consumers to openly talk about purchases with close friends and family in order to appear “knowledgeable” and possess expertise.

So what about rich people?

Interestingly, this same sense of social embarrassment did not affect those wealthier individuals with a higher level of social power. As Dr Bian explains, groups that enjoyed a higher level of social status and power are more likely to be self-centred and less caring of their social status and others’ perceptions of them and were, therefore, more likely to buy visible fakes. This also dismisses the assumption that the CBP market is entirely motivated by financial gain, since members of this group not only knowingly purchase fakes, but do so despite their own financial security and higher social status.

Interesting?

If you’ve found this article interesting let us know by commenting below, or if you would like to know more about Dr Bian’s research, visit her staff page and you’ll see her most recent publications.

 

[1] Grossman, G.M. & Shapiro, C., 1988a. Counterfeit-Product Trade. American Economic Review, 78(1), 59-76.

[2] Bian, Xuemei and Moutinho, Luiz (2009) An Investigation of Determinants of Counterfeit Purchase Consideration. Journal of Business Research, 62 (3). pp. 368-378. ISSN 0148-2963