Assocham study blames China for rising sales of fake ‘luxury’ labels
15 Jan 2014
The market for fake luxury goods with faked labelling is likely to double to Rs5,600 crore by 2015, with Indian consumers lining up for cheap 'duplicates' of luxury labels that are sold by small retailers across the country and now also by online retailers, a study commissioned by the Association of Indian Chambers of Commerce & Industry along with Yes Bank says.
The market for fake luxury labels, including handbags, watches, sunglasses and perfumes, is growing at twice the rate of genuine luxury products. Sales of duplicate-label luxury products in India is growing at an average annual rate of 40-45 per cent from the current base of Rs2,500 crore, the report said.
The industry body called for steps such as effective intellectual property enforcement to curb this problem. "Corrective measures need to be taken to lock down the emergence and existence of counterfeit goods market in the form of effective intellectual property enforcement, plugging loop holes in the legal structure, and higher conviction rates," Assocham secretary-general D S Rawat said.
Globally the fake luxury products market accounts for 7 per cent of the overall luxury goods market, with an estimated value of over $22 billion in a luxury industry worth about $320 billion. In India, fake luxury goods account for about 5 per cent of the overall luxury market, according to the Assocham-Yes Bank Ltd study.
The market for fake luxury goods in India is growing at twice the growth rate of genuine luxury products and is largely being driven by web shopping portals that account for over 25 per cent of the fake luxury goods market in India – and it is expected to grow at a compounded annual growth rate of 40 to 45 per cent at least till 2015, the study said.
Goods made in China, which is the source of a bulk of the copies of coveted labels, are largely fuelling the demand for fake luxury goods in India. ''Over 80 per cent of the entire imitation luxury products in India come from China,'' Rawat said in a statement.
"There is an urgent need to educate customers on brand heritage and create awareness about original products as they cannot be substituted. Luxury brand owners and online service providers also need to work in tandem to address the sale of counterfeits and protect trademarks on the internet," he added.
