White Paper
the Counterfeit Problem
Two Distinct Markets fot Counterfeit Goods
There are two distinct markets for counterfeit goods and they require radically different approaches. The first is the straightforward "full deception" (FD) market, where the counterfeiter attempts to persuade the consumer that they are buying the real thing - often at or near the full normal retail price. Here, the counterfeits need to be of at least apparent comparable quality to the original with identical packaging, logos etc.
The other market is the "Counterfeit Collaborator" (CC) market, where the consumer "more or less" co-operates with the counterfeiter. The consumer knows, or is pretty sure, that the goods are not the real thing, but is more than happy to take a counterfeit at a fraction of the price of the real thing, providing that the counterfeit is likely to be of real value. The most obvious and widespread examples of traded goods in the CC market are software and music, where the digital copies are likely to be 100% as good as the originals.
This distinction is important because it is much easier to deal with the problem of counterfeit where the consumer is on the same side as the brand owner.
$10 Rolex watches, $3 copies of Microsoft XP, fake Nike trainers or Levis generally sit at the CC end of the scale. Most people know they're buying a fake but, in the case of fashion clothing, if it looks good enough to pass for real and doesn't fall apart in their hands then the "status" it brings can supply sufficient self-justification for the purchase.
The counterfeiter is, of course, always on the lookout for the gullible consumer who might even be enticed to part with near full price for the goods (or half price with a convincing storyline to back up the reason for sale) so sometimes these "obviously fake" counterfeits edge towards the FD market.
Tackling the CC counterfeit problem is vastly more complex than the FD counterfeit. With the FD items, we are closer to the "banknote" scenario in that you have the consumer on your side. The Brand Owner and Consumer share a vested interest in ensuring that the product is an authentic branded item. CC consumers, of course, are more inclined to share the interests of the Counterfeiter.
