The world is increasingly falling prey to fakery – fraud products that are cheap, sell fast and are often hard to spot. India is no different. From luxury items to consumer items & durables, our markets today are flooded with fake products most of which make their way in from China.
Rising disposable incomes in the country have pushed the demand for branded products which in turn have encouraged the counterfeit market. E-commerce with its many advantages has further fueled this growth. What’s alarming is that the sales of such goods are growing faster than the overall consumer products market.
Today, India’s thriving counterfeit market stands at a whopping over 400 billion rupees resulting in a 44% increase in losses to the industry. Besides hurting legitimate businesses, counterfeiting also impacts the nation at large as it creates an underground economy where vat, duties and taxes go unreported.
Almost 25% products sold online are fake yet 80% consumers believe that the goods they buy both online and offline are genuine
The biggest threat of counterfeit products, however, is its immediate and long-term impact on unsuspecting consumers.
While consumables cause health problems, counterfeit auto products are responsible for nearly 20% of road accidents in the country
Medicines – India’s fake drug market is growing at a rate of 25% each year and is estimated to be around Rs 4000 crores. Most medicines available are either fake or of poor quality posing a serious health risk in a country where medicines alone account for over 70% of total health spending. What’s worse is that 35% of fake drugs sold all over the world come from India.
FMCG: 22% of packaged food is lost to the grey market. This segment is most vulnerable as low quality and cheap duplicates are easy to produce posing a serious health hazard. So do fake dietary supplements whose booming market is expected to double to $4bn by 2020. Vitamins, minerals and herbal supplements account for a huge 70 % share of the total market.
Similarly, rising demand for deep discounted cosmetic products is leading to a spurt in counterfeit products many of which come with import tags and high levels of chemicals.
Electronics: About 20% of mobile phones sold in India are fake. These phones emit harmful radiations and contain very high levels of Lead and Cadmium. Besides substandard and uncertified batteries and chargers carry the additional risk of catching fire due to short circuits.
Ironically, the country’s national capital is the main transit point for the sale of black market goods and contributes a massive 75% to the flourishing fake goods industry
The Global Fake Industry
The global knockoff market is estimated to be half a trillion dollars a year. India is also one of the major players in it as the fifth biggest exporter of fake goods in the world.
Counterfeiting is so deep-rooted that it is considered to be the second largest source of income for criminal activities such as terrorism
With so many different implications, governments around the world are trying to tackle the issue of counterfeiting head-on. In India though, semi-urban and rural areas are witnessing the new wave of consumerism. It is here that counterfeiting is most prevalent, aided by lack of consumer awareness. Also with a huge majority of Indians trusting the products they buy, the issue is as internal as it is an external one.
So the next time you feel excited about a ‘cheap’ purchase, think again. That great deal may not be so great after all. It could just be a fake!