The negative effects of counterfeiting on the economy

Counterfeiting is a trillion-dollar illegal business having its presence in almost every part of the world. Today, counterfeiting is posing a threat to not just the consumers but also to the economic growth of the nations.

According to an OECD and EUIPO report, “Global sales of counterfeit and pirated goods have soared to 460 billion euros ($522 billion) a year, amounting to a whopping 3.3 per cent of world trade.”

The report also states the nations most affected by counterfeiting which includes the United States, Japan, South Korea and the EU states. However, the effects of counterfeiting are not just visible in developed countries but are also hampering the growth of the developing world.

Let’s discuss some of the impacts of counterfeiting on the economy of a country:

Evasion of taxes: Counterfeiting leads to evasion of taxes. The mammoth counterfeiting industry sells its products in the market without paying taxes to the government. This leads to a loss of the government exchequer and finally, the government is not able to spend enough on welfare projects and schemes.

Rise in unemployment: Since the counterfeit industry takes away the profits of credible companies, they are not able to recruit new employees. The financial instability of the industries creates massive unemployment which is linked indirectly to the problem of counterfeiting.

Diminishes foreign investment: It has been generally seen that countries with weak IP laws and poor regulatory measures become the breeding ground for counterfeit activities. Such countries blur their chances of foreign investments. Counterfeiting diminishes the chances of foreign direct investments and thus block the economic growth of a country.

Fuels other black-market activities: Counterfeiting fuels other black-market activities and is a lucrative business for organized criminals. With the money acquired from the sale of counterfeits, they fund their vast network, which is involved in drugs trafficking, human trafficking, illegal arms, prostitution etc.

Finally, we can conclude that counterfeiting has multiple negative effects, which are very harmful to the economic growth of the country if not checked on time by authorities and the respective governments of their countries.

To get the best anti-duplication and products and solutions call us on +91–785-785-7000 or mail us at connect@ec2-54-210-245-44.compute-1.amazonaws.com.

The rise of counterfeiting in the footwear industry

According to a report by OECD (Organisation for Economic Co-operation and Development) and EU’s (European Union’s) Intellectual Property Office states that the footwear industry is the most affected by the problem of counterfeiting. Some of the famous brands affected by counterfeiting or duplication are Nike. Adidas, Sketchers, Reebok, Asics, etc.

Fake footwear represented around 22% of the overall share of counterfeited and pirated goods seized in the year 2016.

Nowadays consumers have become highly brand conscious, but everyone cannot afford a costly branded product. In order to satiate their need for buying luxury goods at low prices, people have shifted their focus towards fake goods. Selling and buying of fake items are illegal as they violate the intellectual property rights of the brands.

With the growth of e-commerce, it has become quite challenging to stop the sale of counterfeits. This is because a consumer cannot differentiate between a genuine and an original product by just seeing an image online.

According to a report, the global footwear market was valued at approximately USD 246.07 billion in 2017 and is expected to generate revenue of around USD 320.44 billion by the end of 2023, growing at a CAGR of around 4.5% between 2017 and 2023.

Fake footwear may fulfil your urge for branded goods, but they easily wear out or may cause injury or accidents many times. Counterfeit footwear leads to loss of profits, drop down in the reputations of the brands and also leads to massive unemployment.

Duplicate footwear can be curbed with the help of effective regulatory measures, the use of anti-duplication technologies and most importantly by generating awareness among the consumers and retailers regarding the drawbacks of fake footwear items. Some of the anti-counterfeiting measures are holograms, security labels, QR codes, holographic films, and other flexible packaging products.

To get the best anti-duplication solution call us on +91-7857857000 or mail us at connect@ec2-54-210-245-44.compute-1.amazonaws.com.