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The report says that as designer and luxury goods have become increasingly popular, fake-buying is now pervasive in the UK. Over the past ten years a number of factors have combined to make luxury goods more accessible than ever before. On the demand side, consumption is being driven by demographic trends, facilitated by higher incomes and easier credit, and spurred on by changing consumer attitudes and behaviour. In the luxury goods sector, arguably the most influential of these behaviours is Selective Extravagance. This phenomenon, originally termed by Ledbury Research, explains how consumers across the wealth spectrum are trading up and services in some categories, and trading down to mass and discount in other categories. Simultaneously on the supply side, luxury goods firms have created diffusion lines and broad appeal/entry level products that allow consumers to engage with the brands at a much lower price point. The State of Play As these brands become more accessible, demand for them has grown to record levels. Just under half (43%) of the UK population have bought clothing, footwear, leather goods, watches or jewellery from a designer or luxury brand in the last year. Across these categories, over a quarter of the population has bought designer clothing, and one in five has bought designer footwear in the last year (see Chart 1). Even with their higher price points, more than 10% of the population has bought watches, jewellery or leather goods from designer and luxury brands. % of UK population that have bought a genuine luxury/designer product in the past 12 months
However, as demand for luxury goods has increased, so has the availability of counterfeit products. This has reached a level such that fake buying (where a brand name and design of an item are identical to that of another brand) in the UK is now pervasive. Six million people, one in eight adults, or 12% of the UK, have bought an item of fake clothing, footwear, leather goods, watches or jewellery in the past 12 months (see Chart 2). Additionally, 48% of the UK has bought a look-alike: items that closely resemble or mimic the styles of luxury and designer brands. Without a doubt both fakes and previously overlooked look-alikes pose a serious threat to brand owners: from lost revenues, through brand dilution, to almost irreparable negative consumer perception. % of UK population that have bought a genuine luxury/designer or fake product in the past 12 months Who is Buying Fakes? Contrary to popular preconceptions, those who have bought fakes are actually more likely to be genuine luxury goods buyers, as well as higher spenders in some key categories. The perception of a 'typical fake-buyer' is usually based around lower income consumers, perhaps younger, and single. The presumption is also that these individuals spend little
Chart 3 shows just how similar those who have bought a fake look to the rest of the population. Those who have bought a fake in the past year are just as likely to be employed and there are only negligible differences when comparing other demographic characteristics: their likelihood to be in a highly paid job (3% difference), or under 35 years old (2%), or in a relationship (4%). Comparison of profiles of those who have bought a fake in the past 12 months, and those that have not
Another myth to dispel is that those who buy fakes are typically lower spenders as a whole. In fact, the opposite is true. The report compared the average annual spend of those that have bought a fake (in any category) compared to those who have not bought a fake in any category. It was found that that those who had bought any type of fake item actually spend 42% more in a year on leather goods (genuine, standard, or fake), than those who have not bought a fake. Likewise, though fake-buyers spend less per year on clothing and shoes, they spend the same on watches and 11% more on jewellery. The most popular fakes The report found that Burberry - whose famous check was adopted for the baseball caps of so-called chavs - was the brand most often bought in counterfeit form. The next most popular fakes were rip-offs of Gucci, Louis Vuitton, and Yves Saint Lauren products. Walpole, the trade body for the British luxury industry, whose members were presented with the research findings, welcomed the report and said it offered valuable insight for the industry.
EU action On Wednesday, the European Commission put forward a proposal for a Council framework decision to strengthen the criminal law framework to combat intellectual property offences has been withdrawn and its provisions incorporated into the amended proposal for a directive. According to Commission Vice-President Franco Frattini, who is responsible for justice, freedom and security matters, the new provisions proposed by the Commission represent the criminal law dimension of the fight against counterfeiting and piracy in Europe. Effective approximation of Member States’ criminal legislation in this field is the minimum needed to pursue together a major campaign aimed at eradicating these phenomena, which are causing serious harm to the economy. © Copyright 2007 by Finfacts.com |
