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The science behind buying counterfeits

Fake products are made of bad quality ingredients and may even be harmful for the health of consumers. Yet some of them still knowingly buy these. Find out why, and how online brand protection can help diminish the amount of counterfeits available on the market.

Clothes make the man. People look differently at someone sporting a $1000 Givenchy dress; luxury products like that are evidence of a certain kind of status in life that many of us would like to possess.

But what to do if you don’t have $1000 for a dress? Well, maybe there’s a way to have it (or something very similar to it) for a lot less. Enter counterfeiting.

Buying fakes 101

Luxury ladies’ accessories
Luxury ladies’ accessories

There are two kinds of people who buy counterfeits. The first group has no idea that what they’re buying is not the original product.

That’s no wonder: fraudsters are getting savvier every day.

They set up compelling, authentic-looking webshops and it’s increasingly hard to tell a fake product from an original one.

But the second group knows perfectly well that what they’re buying is not the genuine article, and they still go for it.

The question is, why?

Brands, sellers, online brand protection experts, and also scientists keep asking this question all over the world.

Here’s what they found.

Money vs social standing

In their study “Determinants of Consumers’ Willingness to Buy Counterfeit Luxury Products: An Empirical Test of Linear and Inverted U-Shaped Relationship”, Qiong Wu and Shukuan Zhao from the Jilin University in China examined the psychological and social motivations of consumers willing to buy counterfeit luxury products.

The scientists proposed (and went on to prove) a couple of very interesting hypotheses in their paper. First of all, value consciousness (to get the best value for the lowest price) tends to increase a consumer’s willingness to buy counterfeit luxury products. On the other hand, social risk perception (the risk of being found out and judged by peers) decreases the likelihood of somebody buying fake products.

And, most interestingly of all, face consciousness (the desire to gain, maintain, and not lose social standing) has an “inverted U shaped impact” on a person’s willingness to buy counterfeit goods.

The results

Wu and Zhao proved their hypotheses via an online questionnaire conducted in China with over 400 participants from every significant income and age group. The results supported the outlined hypotheses.

Firstly, the higher a person’s value consciousness, the more likely they’d buy counterfeit luxury goods.

A bottle of Chanel perfume
A bottle of Chanel perfume

It’s easy to understand why: the social standing and positive feelings that come from possessing a luxury product are desired by many.

However, since these products often come at a high price, many consumers aren’t able to afford them. Therefore, people with a high value consciousness may look for a cheaper alternative to get the same rewards for a fraction of the price.

Because of this attitude, the free availability of counterfeits on the market is a great risk for brands.

But since changing consumer attitude is a very complex and lengthy process, brands may want to look for a faster and easier solution: limiting the availability of fake products.

Which is an issue online brand protection experts at globaleyez can quickly solve: we discover and eliminate listings of counterfeit goods on over a hundred marketplaces worldwide.

According to the study (and to common sense), fake luxury products can only elevate their owner’s social status if the products are perceived as original by everyone else.

A person with high social risk perception may find the risk of being found out greater than the rewards of owning seemingly luxury products too great, and thus abstain from buying a counterfeit. The results of the questionnaire proved this hypothesis as well.

As counterfeiters are getting better and better in faking products or even bypassing barriers to get the original product in a malicious way (like streaming of football games, stealing/hacking of serial keys for software, etc), the willingness of consumers to buy products from a dubious source may even increase. Why? Because if the product doesn’t look fake, the chance of being found out (and thus losing face) diminishes.

- Felix, Project Manager at globaleyez

This makes it important for brands to take action: go the long way and educate people about the bad effects of counterfeiting and at the same time have a comprehensive online brand protection program in place.

globaleyez offers to monitor specific sales channels, enforce against infringing listings via takedowns and legal follow-ups, track your distribution channels and possible leaks for grey market products, conduct test purchases to verify the source and nature of counterfeit goods, and much more.

Finally, as the third hypothesis of the study points out, face consciousness has an interesting effect on people’s willingness to buy counterfeits. Consumers with low face consciousness don’t care about owning luxury goods and are therefore less likely to buy counterfeit versions of them.

Those with more face consciousness typically want to increase their social standing by possessing luxury goods but lack the funds for purchasing originals may opt to buy counterfeit products.

However, people with the highest level of face consciousness may worry about being found out and losing face for owning counterfeits, which in turn decreases their likelihood of purchasing such products. Thus, the existing level of face consciousness in a consumer has an inverted U shaped impact on their intentions to buy counterfeit luxury products.

While this study was conducted in China and some elements like face consciousness may not be as important to consumers in other cultures, the findings can be still valid for brands anywhere else in the world. Discovering what motivates people to knowingly purchase counterfeits is the first step to creating a solution that will discourage them from doing so.

Price and availability

A different study conducted in the US examined the demographics and most popular fake products. According to the findings, men more often purchase counterfeits than women: 51% of male respondents admitted to knowingly buying fake products as opposed to 40% of female participants. The younger the respondents, the more likely they are to purchase counterfeits: 70% of 18-25 year-olds and 63% of 26-40 year-olds bought fake products intentionally.

Interestingly, annual income has a different effect on the willingness to buy fakes than we’d initially think. The higher their annual income, the more willing respondents turned out to be to purchase counterfeits.

This creates an interesting connection with the notion of face consciousness in the Chinese study: the lower the income, the less money people can spend on (real or fake) luxury goods, which may cause them to develop a lower level of face consciousness and altogether find it less important to possess luxury goods.

As to the origins of counterfeits, 76% of people believe that there’s a higher chance of running into fake products online than in stores. However, when it comes to small shops selling branded products, 70% of respondents believe that over a half of these shops don’t have permission to sell these goods. 20% of people think that none of them do. And yet, 43% of people still buy products from shops like these.

Risks vs money

The most popular fake products are items that are often used and publicly displayed in everyday life. 20% of respondents have knowingly purchased fake wallets and handbags. Accessories like jewellery and watches come in close second (19%) while fake clothes are third (18%) and footwear is fourth at 14%.

Buying counterfeits comes with certain risks like health hazards, bad quality and harming others. Some people may not know these risks. But, as it seems from the results of this study, quite a lot of them do.

In fact, 55% are aware that buying counterfeits harms the brand whose product is being ripped off. 49% know about the potential health and safety issues, and 47% also understand that their purchase may fund dangerous criminal activities like money laundering and gun trafficking. And yet they still go for it. Why?

Because it’s available and easy to reach (24%) and cheap (47%). Which means that tackling the problem of counterfeits may be more effective from the supply side of things, as we’ve seen that demand will - sadly - always be there.

Although, on a more positive note, there are several providers offering solutions to consumers who want to buy original products from authorized distributors at original prices. With providers like authorized.by, consumers have the option to verify whether a seller is authorized and the product is authentic.

The implications for brands

The sale of counterfeit goods is harmful to brands, consumers, public safety and the economy alike. It’s bad enough when unsuspecting consumers fall victim to fake products. But, as we’ve seen, there is a considerable amount of people who knowingly purchase counterfeits. In fact, there are even influencers who advertise fakes and encourage their followers to buy them.

These studies and many others have shown what motivates people to act like that. Now it’s up to brands and brand protection experts to reverse this trend and diminish the willingness of consumers to buy counterfeits.

There are no easy answers. Depending on each brand and its target audience, strategies and solutions may differ to achieve the best results.

Perhaps your brand could run a campaign emphasizing the health hazards of buying counterfeit versions of your product. Seeing the gory consequences of using fake moisturizer or perfume on a picture may deter people from putting such substances on their skin.

Badly damaged skin on a person’s hand
Badly damaged skin on a person’s hand

Or perhaps creating a product line aimed at consumers from lower income brackets may help with satisfying the value consciousness and need for social recognition in them so that they won’t turn to counterfeits any more.

One thing is sure, though: brands have to take this issue seriously. If they don’t, they stand to lose a lot more than simple revenue.

How online brand protection can help

Fighting against counterfeits is an important part of our job at globaleyez. We discover and remove content from the internet that infringes on our clients’ IP rights. A lot of that content is actually counterfeit listings on online marketplaces and social media, or infringing domains of fake webshops.

With each removal, we reduce the easy availability of counterfeits, a thing that greatly contributes to their popularity. Nobody makes a big effort to buy fake products: if they’re not right in front of customers, they won’t go looking for them.

Which is why it’s crucial for brands to set up a comprehensive online brand protection program. This is the only way to ensure the quick detection and removal of fake listings, which seriously diminishes fraudsters’ abilities to reach customers.

Contact globaleyez and find out how our services will fit into your brand’s fight against counterfeits.

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