brand larceny
Posted by Barry Silverstein on December 10, 2009 04:20 PM
For years, luxury brands and hot-selling products have faced a chronic problem unrelated to the economy: counterfeits. But in today's money-tight market, cheap fakes of such brands as Chanel, Gucci, Rolex, and Tiffany are more popular than ever.
That's why the city of New York is taking swift action during this holiday season. In the last two days, New York police have raided locations in Manhattan's Chinatown, an area in which counterfeit brands are as common as city traffic lights. The raids came about through a special crime unit that has been making uncover purchases of counterfeit goods, and the operation has already resulted in the seizure of $1 million worth of fake bags and watches.
New York mayor Michael Bloomberg says "We're just not going to have any tolerance for people selling knock-offs. It's not fair to companies that invest in their brand."
New York's experience with black-market brand knock-offs is indicative of a much larger problem. Last year, counterfeit fashion goods accounted for 60 percent of all goods seized at the U.S. border, according to the American Apparel & Footwear Association.
Product counterfeiting is even worse outside the United States. In China, for example, there has been a virtual explosion in counterfeit, or "shanzai" (black market) cell phones, which sell for as little as $20 each. The "Hi-Phone," for example, is openly sold as a knock-off of Apple's iPhone: "The phone's sleek lines and touch-screen keyboard are unmistakably familiar. So is the logo on the back." Fake Motorola, Nokia, and Samsung phones are also widely available.
The fakes are popular even with potential safety hazards due to inferior batteries and other quality control issues. Already, more than 20 percent of cell phones sales in China are counterfeit, and they are even being exported to other countries. Despite complaints from legitimate manufacturers, China has done little to crack down on the phones.
Whether it's fashion or phones, counterfeits won't be controlled until consumers stop buying them.
More about: Luxury, Chanel, Gucci, Rolex, Tiffany, Mayor Michael Bloomberg, American Apparel & Footwear Association, Hi-Phone, Apple, iPhone, Motorolla, Nokia, Samsung
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