When fakes speak louder than words!!
The market for counterfeit products in the country is around US$600 billion a year and has grown at over 10,000 per cent over the last two decades
From fake Gandhi—a term used for counterfeit currency, spurious medicines, chocolates, toffees, cold drinks, wrist-watches, mobile phones, electronic gadgetry, adulterated food-stuff, ghee, cheese and other milk products—what is it that is not planted on you.
Fake, counterfeit, bogus, copied, fictitious, forged, phony, pirated, pseudo, deceitful imitation, cloned, forged, phony, or sham – you will run out of breath but not words to describe the business of profiteering or marketing something which is essentially not genuine. In other words, you might call it the process of reverse-engineering or copying original products and distributing the look alikes to make a hefty profit.
Make no mistakes – Made in India, Faked in China – is a big and growing international business where all kinds of sub-standard healthcare, skin, hair or oral care products, cosmetics and electronic goods are being pushed into the market at unimaginably low prices, with higher distributor-dealer margins and lucrative get-rich-quick schemes for the retailers and suppliers that only the copy-cat marketing companies can afford. Can you imagine that for every 100 strips of genuine Vicks Action 500, there are 54 counterfeit strips being sold in the market – an ORG-MARG survey revealed! And if you think this is a problem only in the urban areas, you are sadly mistaken! Almost 75 per cent of the manufactured goods today are being sold in rural India where people have the purchasing power and the urge to buy – an analysis by the National Samples Survey (NSS) reveals. The rural consumer too sees the same advertisements on television and desires the same brands. This is what makes it easy to sell them a look-alike – of course with the connivance of the local shopkeeper who wants a higher profit. This a game a genuine company cannot play beyond a point as they have to maintain a certain quality of the product while factoring in the expenses, overheads and profit margins.
There are two kinds of duplicate products in the market today—the absolute fakes, which make it a point to copy everything from the font, colour and label and carry the same name and address of the genuine manufacturer and the pass-off products with rhyming of similar sounding, misspelt name of product like say ‘Tytan’ or ‘Tifon’ instead of a Titan watch, ‘Casptan’ instead of ‘Capstan’, ‘Clino Plus’ instead of ‘Clinic Plus shampoo, ‘Dadur’ instead of Dabur or ‘Coca Coca’ instead of ‘Coca Cola’. The motive obviously is to mislead the ordinary consumer who is uneducated or in a hurry to purchase.
To improve consumer awareness about the issue in the right earnest, FICCI
has initiated FICCICASCADE whose mandate to take on anti-smuggling
and counterfeiting activities working hand in hand with the government,
enforcement agencies and the media
According to a study conducted by a leading research agency AC Nielson, the biggest loser in the process is the FMCG industry which ends up losing around Rs 2,500 crore annually to counterfeits and pass-off products. The fake products are affecting the sales of leading brands by almost 20-30 per cent. But an even bigger loss the leading companies face is the loss of image and brand loyalty among consumers.
All this is a very scary if you consider the manner in which counterfeited, fake and smuggled goods have swamped our economy. It is a growing menace — the biggest crime against a nation’s economy and the wellbeing of its people. People are lured by short-term gains but end up spoiling their health, safety and peace of mind. According to the ‘Effects of Counterfeiting and Piracy on India’s Entertainment Industry’, a report prepared by Ernst & Young India for the US-India Business Council (USIBC), just the Indian entertainment industry loses around 820,000 jobs and about US$4bn each year because of piracy. Add to this the injuries suffered by thousands of consumers every year, and you’ll realise that this is an irreparable loss.
The government itself is losing about Rs 6 billion by way of unpaid taxes and duties from the FMCG sector. Clearly while the innovator or manufacturer of a genuine product has to spend on innovation, invention, product development, staff welfare, government cess, duties and taxes and such other things – which are built into the product pricing – the counterfeiter comes from behind and without bothering copies, scams and runs away.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has taken up cudgels on behalf of the Industry and is of the view that the government and the industry need to coordinate for solving the problem before it gets any bigger.
Broadly estimated to be a business worth above US$ 540 billion, pirated and counterfeit goods account for roughly 7-9 per cent of global trade, as per the statistics from the World Customs Organisation (WCO). According to the World Intellectual Property Organisation (WIPO), counterfeiting is costing the global economy more than US$ 100bn a year. According to FICCI, the market for counterfeit products in India is estimated at around US$600 billion a year and has grown at over 10,000 per cent over the last two decades.
Consider the impact of all this on the healthcare sector where close to 15-20 per cent medicines being sold are fake. Similarly, the Rs 2,500-crore worth of inferior quality and fake automotive spare parts being sold might end up endangering passenger safety beside damaging the vehicles. According to Indian Automotive Aftermarket Study 2011 – a report prepared by Automotive Component Manufacturers of India – in most cases consumers buy counterfeit parts to save on costs, little realising the impact of this on the vehicles’ roadworthiness and safety.
A mere 10 per cent reduction in the piracy rate has the potential to create 50,000 additional jobs in India, particularly in the IT sector where close to 80 per cent of the fake goods are being dumped on unwary customers. According to FICCI, there are several laws in India to deal with the issue but the problem arises when these laws are not implemented properly. The FICCI has recently taken up a joint publicity campaign with the Ministry of Consumer Affairs under the ‘Jago Grahak Jago’ and ‘Bhagidari’ with the Delhi Government. In addition, FICCI is collecting and analysing data on the impact of counterfeit goods in core sectors of industry and tracing its magnitude and impact on the country’s economy.
India is fast becoming a major destination for counterfeiting of branded goods. Some of India’s neighbours are actively manufacturing fakes and putting a ‘Made in India’ label as part of State policy. This is an economic warfare where the aim is to infiltrate more goods and discredit Brand India in the international market.
To improve consumer awareness, FICCI has initiated FICCI-CASCADE, a committee whose mandate is to take on anti-smuggling and counterfeiting activities while working with the government, enforcement agencies and the media and eventually to find a possible solution to the problem. “Counterfeiting is hurting everybody – consumers, industry and the exchequer,’ says Anil Rajput, chairman of the anti-smuggling and anti-counterfeiting committee of FICCI.
To popularise the issue among the students – 5th Hum Kishore Festival with the theme “Fight Smuggling and Counterfeiting” was organised in more than 100 schools of Delhi and the National Capital Region. FICCI CASCADE is also organising an Industry-Government seminar on June 8, which is being observed as the ‘Anti-Counterfeiting Day’. g