Research by BrandMonitor, a company specializing in brand and trademark protection, indicated that two thirds of counterfeit sellers admit selling fakes. Moreover, 46% of those who admit selling fake goods assume they were not breaking the law. The fact that counterfeits can be a hazard for consumers’ health or safety is not a priority for merchandisers or even for consumers themselves. According to merchandisers, counterfeits is more attractive to consumers because of lower price.
How many consumers realize that the good is counterfeited is not possible to define, but if the consumer knows that the good is counterfeited, he or she anticipates that the price will be much lower in comparison with the price of original branded good. If the good’s price is lower than the price of original good, consumers buy goods more readily and the merchandiser can cover his operational costs and run the business. The factor of quality is not priority because first of all it is not original good and, secondly, consumer checks the quality not so closely and does not expect the “long live” of purchased good.
The most merchandisers admitted they sell counterfeited goods in Kazan city (89%), in Krasnoyarsk city (78%), in Moscow city (70%) and Ufa city (71%). In Nizhny Novgorod city admitted only 42%. The fact that in some regions the percentage of those admitting they sell fakes is low could indicate that the enforcement of IP rights is very active, according to experts of BrandMonitor. There is another very interesting and important fact – almost half of merchandisers, who admitted they sell counterfeited goods – believe they don’t violate the law.
Some of merchandisers realize selling counterfeit is illegal but don’t tell the consumer that their good is counterfeited. 20% of counterfeit merchandisers presume that their goods can be of low quality. 10% of such merchandisers believe the quality of their counterfeited goods is better than the quality of original goods. 70% believe and claim the quality of their counterfeited good is of perfect quality and there is not any hazard to consumers’ health or safety.
To the some extend the experts have also analyzed the other side of business (counterfeits trading) – financial, i.e. book keeping. Only 10% of merchandisers give the consumers the correct receipt, complying with all applicable rules and standards. It could also mean that they pay taxes to the state budget and Russian state receives revenues from merchandising of counterfeited goods. About 24% don’t give receipt or any other document proving the sale of good. More often the merchandisers give consignment notes or any other document.
The interesting thing is that sometimes merchandisers provide the consumer with any document (receipt, consignment note etc.) in order to guarantee the quality of good during two weeks following the sale. The Russian consumer law provides the consumer with the opportunity to change the good if the quality is not appropriate or to return back the sold good and receive money back. Certainly the merchandisers are not intended to give money back, they are ready to change the good to other identical good but of good quality.
The purposes of research was to find out whether the merchandisers of counterfeits admit they sell fakes and whether they realize violation of IP law. At the first stage of research the experts have discovered where the counterfeits are sold – the places of sale – and made control purchases in five categories of goods: consumer electronics, watches and accessories, close and shoes.
After the control purchase of goods the company carried out their expertise. In those cases, where the counterfeiting has been confirmed, the company has sent interviewers to the outlets where the confirmed counterfeit has been bought.
According to another finding of BrandMonitor approximately 86% of Russians are ready to buy counterfeits and approximately 75% of Russians are ready to present counterfeits as a gift.