Countering counterfeits involves shaping policies for better surveillance, control and prevention of public health risks

A brand is a shortcut that transmits promise, acceptance, trust, and hope to consumers. Consumers generally rely on brand names as indicators of quality and status value. Consumer demand for luxury-brand goods is increasing due to the desire of being in tune with fashion and fads. With the rise in consumers’ aspirations for a better quality of life, there is concurrent increase in counterfeiting. Counterfeiting has become a global, multi-billion dollar problem and one that has serious economic and health ramifications for governments, businesses and consumers to deal with. These products, which are often substandard, can pose significant health and safety risks to consumers. Moreover, it appears that fake products, which have traditionally been sold in open markets, are increasingly finding their way into legitimate distribution systems, and thus onto the shelves of established shops.

Counterfeiting and piracy affect virtually every industry and no country or product is immune. Once, fake and look-alike products were restricted to watches, designer apparel, and movies; but today counterfeiting includes diverse product categories such as pharmaceuticals, electronics, mobiles, automotive parts, and computer software. About 4.4 per cent of the total consumer complaints registered at National Consumer Helpline from January to September 2018 relate to fake/spurious/duplicate products. Majority of these complaints (82.1 per cent) are regarding delivery of fake products purchased online, 26 per cent of which relate to mobile phones and accessories. In offline retail sector, 14.3 per cent complaints of counterfeit goods are of consumer durables and electronic products, and 3.2 per cent complaints are from food, spurious drugs and cosmetics and FMCG products which are major concern for the health and safety of consumers and these are rampant in rural markets.

Rural India has grown over the years, not only in terms of income but also in terms of thinking. Rural households are now seeing a dramatic shift towards prosperity. The purchasing power in the countryside has resulted in the growth of the rural markets. Brand adherence is high among village consumers. However, their brand recognition is often on the basis of logos, symbols, colours rather than the exact brand name. This tendency is partly responsible for the widespread menace of spurious products in rural markets, as it is easy to deceive the rural consumer with look-alikes. The brand image of the successful FMCG majors has been imitated by some of the small regional companies. Rural markets are more affected by spurious products because of illiteracy and lack of awareness of rural consumers is much higher than their urban counterparts.

A study conducted by the Centre for Consumer Studies at the Indian Institute of Public Administration indicates that awareness regarding popular brand of products available in the market is slowly increasing among rural consumers: 15.5 per cent of them were aware about the popular brands and more than half (57 per cent) were aware about the popular brands of products to some extent. Indian rural markets are flooded with duplicate products. Lack of awareness, low purchasing power and easy availability of duplicate products further boost sales of duplicate products in Indian rural markets. However, the most strange thing about Indian rural markets is that the people are purchasing duplicate products even after knowing that the product is duplicate: 33.1 per cent of the respondents were very much aware about the fake bands available in the market, 42.3 per cent were aware to some extent, while 24.7 per cent were not at all aware about the fake products being sold. Trading of low-quality fake consumer goods is posing a serious threat to the FMCG market as the counterfeit market has grown 44.4 per cent per annum higher than the rate at which the overall consumer goods market in the country is growing.

When asked whether they have purchased fake products, 65.6 per cent said “Yes” and 34.4 per cent said that they never purchased any fake product. Majority of them (59.2 per cent) purchased it unknowingly whereas only 40.8 per cent did so it knowingly. However, the 80.4 per cent of the consumers who purchased the fakes unknowingly ignored the issue and did nothing about it. This indicates that either consumers are ignorant about the redressal mechanism or are apprehensive about raising their voice. One of the major causes of consumers getting cheated is overall apathy and lack of awareness. It was found that 61.3 per cent never checked the particulars as the products look similar to original products; 69.1 per cent never verified the manufacture’s address, 50.5 per cent never checked the packaging (design, logo, colour etc) and 50 per cent never saw the date of manufacturing or the batch number.

Both the government and the industry have not been able to check this menace. The companies must focus on technological advancements and innovative packaging solutions, making it difficult for counterfeiters to ‘crack’ or replicate their products. There is a need to shape policies for better surveillance, control and prevention of public health risks associated with counterfeit goods. Awareness amongst the rural consumers is one of the key counter-attacks on these profit-eating enemies of companies. For that the companies should also give adequate information to consumers in local languages.

Author is Assistant Professor at IIPA