The availability of counterfeit goods was assessed in twenty cities across the globe, and with 8 out of the 12 goods available in London, the UK’s capital emerged as one of the cities where fake goods are most readily available.
High Street retailers and brand owners are locked in a battle against counterfeit goods salesmen as consumers hunt for bargain presents in the run up to Christmas.
According to research undertaken by KPMG, counterfeiters also appear to be targeting the proverbial female Christmas stocking, with ‘gifts for her’ featuring heavily on a list of the most readily available counterfeit goods.
KPMG’s research involved a team of mystery shoppers* looking for counterfeit prices for a range of popular and ‘must have’ Christmas presents including perfumes, lipsticks, DVDs and smart phones.
The availability of counterfeit goods was assessed in twenty cities across the globe, and with 8 out of the 12 goods available in London, the UK’s capital emerged as one of the cities where fake goods are most readily available. In London, the shoppers found it easiest to locate designer handbags, watches and perfumes, but counterfeit toys, console games and portable tablets were not so openly for sale.
It also emerged that unsuspecting consumers may be duped into thinking they are getting a bargain with many imitation goods being sold at drastically discounted prices. A pair of ‘designer’ sunglasses could be purchased in London, for example, for around eight percent of the list price of the genuine article and in Shanghai a small hand bag could be found discounted by almost 97 percent.
David Eastwood, Global and UK Head of KPMG’s Intellectual Property Practice, says: “The High Street may be in slightly better health than it was a year ago, but its recovery is under sustained attack from counterfeiters determined to prey on the pressure many people feel to ‘deliver the goods’ to their loved ones at Christmas. It may be true that everybody loves a bargain, but the damage to society and cost to health of buying fraudulent and fraudulently obtained goods should never be understated. As counterfeiters look to cash in on shoppers trying to stretch their limited budgets it is vital that Customs and companies continue to tighten anti-counterfeit measures making it harder for fake goods to find their way onto our streets.”
KPMG’s global investigation of counterfeit trading identified the top five fake goods as watches, handbags, sunglasses, perfumes and trainers. However, it is clear that the authorities in some countries are better at tackling this threat to their economy than others. For example, in Prague only two out of five of the most popular counterfeited goods could be found and in Cologne only one was easily accessible.
The research also explored the proliferation of imitation goods for sale online, with KPMG’s mystery shoppers searching for fakes across their local domain websites. Surprisingly, in some cities none of the counterfeit items in the shopping basket were openly available online - in particular Prague, Istanbul, Dubai and Johannesburg. All 12 items were only found in three cities - Shanghai, Mexico City and Sydney.
Eastwood adds: “In places such as Cologne, Dubai and Prague there is tight regulation around selling counterfeit products online and clearly this regulation has been successful.”
A search of UK websites reveals that only five of the 12 counterfeit goods in KPMG’s shopping basket could be found quickly. Those not easily found included DVDs, perfumes, toys, portable tablets and trainers. The first most likely because DVDs are often downloaded via BitTorrent and the latter group because consumers prefer to ‘test or try’ before they buy and are also concerned about safety issues relating to electronic and beauty products.
However, it is clear that many consumers are still easily misled when it comes to purchasing high end branded items online. Although suspicions should be raised by large discounts on handbags or sunglasses, many consumers remain attracted to supposed savings via websites.
Eastwood concludes: “Saving 94 percent on a so-called designer handbag from a local UK site in London may seem like an opportunity that is too good to be true. The sad reality is that it almost always is. The problem is that online counterfeiters can dupe consumers into thinking they are buying genuine goods, discounted because they are last season’s stock, by simply showcasing a picture that they can copy from genuine retail sites. They make the goods look genuine, the sites look genuine and as a result the offer looks genuine too. The end result is, of course, disappointment when poor quality goods arrive and the option to return them doesn’t exist.”
- ENDS -
For further information, please contact:
KPMG Press Office
T: 020 7311 5271
M: 07917 384 576
KPMG Press Office: +44 (0) 207 694 8773
Notes to editors:
* The research was undertaken by exploring the opportunities available to consumers and the counterfeit goods circulating in marketplaces. At no point did the shoppers purchase any of the counterfeit products - they were simply assessing availability and negotiating prices.
KPMG’s ‘counterfeit Christmas index’ basket contains:
1) DVD - movie in current Top 10 chart
2) Console Game – in current Top 10 chart
5) Smart phone
6) High end trainers
7) Leading designer sunglasses
8) Leading designer handbag
9) High end branded watch
10) High end branded perfume
11) High end branded lipstick
12) Branded jeans
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.