Clear and present danger

By Haydn Simpson


Looking at this article (click here to view) from MIT, I can only comment that there is a reason that many roads concerning online counterfeit and fraud really do lead to China.   It is well documented that luxury goods are hit hard by the counterfeiters, especially in the domestic Chinese market with our own data telling us that up to 80% of listings containing some brands on Taobao offering counterfeit goods.  The continuation of this challenge, allied with explosive growth, is a clear and present danger to brand owners.  Deloitte tells us that growth for luxury goods sales in China in 2013 was 30%+ in that single year – even with the current economic slowdown, China represents an ongoing and significant market opportunity. 

In terms of combating counterfeiting and fraud, there is no doubt in my mind that cooperation between brand owners, specialist intermediaries and government agencies produces results. Brand who establish internal brand protection teams, use third party brand protection specialists to provide business intelligence and enforcement services, and who liaise with organisations like PIPCU and EUROPOL stand a much better chance of understanding and taking effective action against the proliferation of counterfeit available both on and off the internet. 

The disruption of the counterfeiter’s and fraudster’s activity is key to success, alongside the pursuit of civil or criminal damages.  Hit them in the wallet and make it hard for them to operate and you will see significant results.  Suspend their websites and deny them a route to market.  Deactivate their accounts and take their income away.  Put pressure on them and change their behaviour.  Take away the spam and deny them a fundamental way of attracting new victims.  All these techniques work.

But it needs cooperation.  Which is why it is so disappointing to see large financial institutions shielding the counterfeiters from proper investigation and action.  If China wants to shed its image of harbouring, and even encouraging, illicit activity, institutions such as banks need to play their part.