Adidas vs Abibas, Bisleri vs bilseri: Counterfeit products and the economy

-Picture extracted from a twitter post

Did you go to KFC (Kentucky Fried Chicken) or KFC (kwality food cafe)? As suggested by the examples above, counterfeit products are manufactured by a third party who tends to have a similar trademark/name to that of a trusted brand but is not legitimate. It’s not just about KFC, Adidas, or Bisleri but is about hundreds of trusted brands whose counterfeit products prevail in the market creating chaos among consumers. This existence of counterfeit products hampers the economy and even the big businesses. 

Every time a consumer consumes a counterfeit product, the original company loses profit as well as the consumer’s trust. These trusted brands have spent over years to create a brand image and trust amongst these consumers through quality products and customer care. But when a low-quality counterfeit product enters a market and reaches a household, the lack of desired service and quality disappoints the consumers leading to distrust and a tainted brand image. Despite being a counterfeit product it will have a significant impact on the original company’s revenues. This will prevent these companies from economic growth. 

Buying these counterfeit products also results in job losses. This is strange but according to the “The Economic Impacts of Counterfeiting and Piracy – Report prepared for BASCAP and INTA” globally 4.2 to 5.4 million job losses are projected by 2022. According to Forbes, the counterfeit economy is already responsible for 2.5 million job losses. This significantly alters the income of these people which leads to lowered standard of living and quality of life. According to the US chambers of commerce, counterfeit products cost the economy over $500 billion annually. The economy is dampened in such a scenario.

However, the economy starts facing significant losses when the government fails to collect taxes. Counterfeit products give rise to unpaid taxes and the government loses out its income. Moreover, more cost is needed to protect the IP rights. Counterfeit products also embark on black marketing. It also discourages entrepreneurs as innovation starts diminishing and “copying” takes place.

On the other hand, counterfeit products have comparatively lower prices which serves as a lucrative purpose to many households. However these third-party manufacturers do not have legitimate sources, so there are various security concerns. Safety concerns are usually high when you are purchasing fake electronic products. The semi-conductors of these products are usually altered risking health and safety concerns and defaming the original company. Moreover, if you have to complain, get a refund, or seek customer care then you’ll struggle. 

It’s necessary to keep an eye on what you are buying. Make sure to read the labels properly. Counterfeit products usually are short-term investments and generally, consumers don’t experience a quality experience. New startups and businesses should be aware of this and should protect their IP rights, patent their innovations, and save their trademark. Buying real goods keeps you as well as the economy safe.

-Preeti Pantha