By: Sonali Banerjee
Ever happened, that even after taking a medicine that promised ‘relief from headache in 10 minutes’ failed to work its magic?
You bought, at a great offer, a hot shot branded watch and
spared not even the stranger at the bus stop from the shiny glow of your hot
shot branded, only to find it unceremoniously broken after a month.
Even your Jimmy Choo failed to make an impression as its
soles could barely hold for a month.
This kind of failing of products happens everywhere, to everyone and every time, it is shrugged off by us as yet another manufacturing defect that had to find its way across to you.
If only that was the case!
Counterfeits and smuggled goods have been around for as long as the real deals have been. And they have been making as much money, if not more, as the real deals. We often tell ourselves that buying that ‘Preda’ bag is really no big a deal as it costs you less than the fraction of the cost of Prada and manages to look as good. But what we don’t realise or rather are unaware of is that these very counterfeit products create a black hole in the economy and fund the terrorists activities that end up taking millions of innocent lives around the world.
Having second thoughts about the ‘Leve’s’ that you bought last week, are you?!
In order to make the point clearer, let’s go over a few statistics, and these statistics actually make sense:
Ø The international trade in counterfeit products is
estimated to exceed six per cent of global trade. In other words, knock offs
make 6% more money than us.
Ø According
to reports, in 2011-12, the Indian Government suffered losses aggregating to
more than Rs. 5000 Crore. That effectively translates into Rs. 5000 Crore less
of infrastructure and government programmes for us as citizens of India.
Ø The
North-Eastern part of the country, which shares 98% of its border with five
different countries is worst affected. There, counterfeit medicines are
available over the counter. The negative impact on the health of people need
not even be mentioned.
Ø In
terms of numbers, Pharmaceuticals and FMCG are the worst hit, with the latter
losing up to 45% of their market share to counterfeits. To directly relate it
to you, think about the loss if you were employed with an FMCG company.
And that, to use a clichéd term, is just the tip of the ice-berg.
The problem of smuggling and counterfeiting and the consequent losses are like a bottomless pit, in which the world economy is falling. Counterfeits enter the mainstream market because of a porous supply chain and make money in the market because they sell at a cost that is at least 40%-45% less than the cost of the authentic product. Going by the laws of Economics that assumes the consumer to be rational who increases his consumption of the product whose cost is less but provides equal satisfaction, counterfeits are going to make all the money here. But here, it is the rational consumer only, who can make this stop.
India and China are the two countries that are most affected by this problem. The popular notion is that counterfeiting and smuggling are a kind of ‘victimless crime’ that negatively affects only the large industrial houses in their topline and bottomline figures. And in a country where poverty glaring co-exists with swanky branded showrooms, anti-capitalist and anti-industrial sentiments are easy to proliferate. The makers of fake goods benefit from the little money they make and the buyers benefit from the little money they have to pay. But the truth is that if the consequences were really as innocuous, then the world would have remained really as innocent!
Picture this. Arms and ammunition cost a bomb (no pun intended). Terrorists and criminals need funding for this and since they cannot walk into a bank for it (for obvious reasons), they look for alternative methods. Making cheap knock offs of popular brands do not exactly require the skills of Einstein and considering that border trade is not well regulated and also the most difficult to monitor, counterfeit products enter the supply chain and markets of neighbouring countries. The money made from these products then go on to fund the activities of terrorists who strike at will and in the aftermath, we find ourselves crying hoarse over non activity of police and the government.
For every situation, at least one of the strings is always in your hands.
The problem is clear. Counterfeits and smuggled goods are not a victimless crime. We are being made the victims of it on a daily basis, and to make matters worse, we do not even realise the role we end up playing in making the Indian economy poorer by Rs. 5000 Crore. It is easy to say here as well that the government needs to take measures, regulations need to be made stronger and in general, the buck needs to be passed on to someone else.
But when we are aware of the colossal crime that is happening and the grossly negative impact it has on our daily lives, it is not that easy to shrug it off and blame the government, or at a micro level, blame ‘manufacturing defects’. In short, here, you, the rational consumer, can actually make a difference by knowing the value of real and the impact of counterfeit. Here, you, the rational consumer, can make a difference, by, to use another clichéd phrase, ‘Saying No To Counterfeits’.
After all, it is your country and you have to work in this economy. So why not make it clean and profitable?
And that, to use a clichéd term, is just the tip of the ice-berg.
The problem of smuggling and counterfeiting and the consequent losses are like a bottomless pit, in which the world economy is falling. Counterfeits enter the mainstream market because of a porous supply chain and make money in the market because they sell at a cost that is at least 40%-45% less than the cost of the authentic product. Going by the laws of Economics that assumes the consumer to be rational who increases his consumption of the product whose cost is less but provides equal satisfaction, counterfeits are going to make all the money here. But here, it is the rational consumer only, who can make this stop.
India and China are the two countries that are most affected by this problem. The popular notion is that counterfeiting and smuggling are a kind of ‘victimless crime’ that negatively affects only the large industrial houses in their topline and bottomline figures. And in a country where poverty glaring co-exists with swanky branded showrooms, anti-capitalist and anti-industrial sentiments are easy to proliferate. The makers of fake goods benefit from the little money they make and the buyers benefit from the little money they have to pay. But the truth is that if the consequences were really as innocuous, then the world would have remained really as innocent!
Picture this. Arms and ammunition cost a bomb (no pun intended). Terrorists and criminals need funding for this and since they cannot walk into a bank for it (for obvious reasons), they look for alternative methods. Making cheap knock offs of popular brands do not exactly require the skills of Einstein and considering that border trade is not well regulated and also the most difficult to monitor, counterfeit products enter the supply chain and markets of neighbouring countries. The money made from these products then go on to fund the activities of terrorists who strike at will and in the aftermath, we find ourselves crying hoarse over non activity of police and the government.
For every situation, at least one of the strings is always in your hands.
The problem is clear. Counterfeits and smuggled goods are not a victimless crime. We are being made the victims of it on a daily basis, and to make matters worse, we do not even realise the role we end up playing in making the Indian economy poorer by Rs. 5000 Crore. It is easy to say here as well that the government needs to take measures, regulations need to be made stronger and in general, the buck needs to be passed on to someone else.
But when we are aware of the colossal crime that is happening and the grossly negative impact it has on our daily lives, it is not that easy to shrug it off and blame the government, or at a micro level, blame ‘manufacturing defects’. In short, here, you, the rational consumer, can actually make a difference by knowing the value of real and the impact of counterfeit. Here, you, the rational consumer, can make a difference, by, to use another clichéd phrase, ‘Saying No To Counterfeits’.
After all, it is your country and you have to work in this economy. So why not make it clean and profitable?
FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) is a division of FICCI that is tirelessly working to spread awareness about the impact of use of counterfeit products and develop programmes to curb these activities. MIC and FICCI CASCADE have partnered to host Confluence’13. The theme for this event is ‘Anti-Smuggling and ‘Counterfeiting’.
Disclaimer: The names of the brands used in this article are used purely for the purpose of giving referential examples and do not imply any direct relation to the brand.
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