Demand for luxury and designer clothing, footwear, jewellery, watches and leather goods is growing and the sub-market in the luxury segment of fake or counterfeit luxury goods is keeping pace. According to Mark Ritson, associate professor of marketing at Melbourne Business School, the luxury goods market is tipped to grow to 1 trillion in global sales by 2010. And with the top luxury brands enjoying operational margins of 60-70%, its not hard to see why many brands view counterfeit products as the biggest threat to these brands, adds professor Ritson. According to World Customs Organisation, the global fake market for luxury goods is estimated to be more than $27 billion.
The Counterfeiting Luxury Report 2007 by Davenport Lyons, a UK-based business law firm, points out to the growing trend of fakes being bought while travelling globally. As short and long-haul travel becomes increasingly popular, more people are visiting regions such as Europe, India and the far East, and are also buying more fakes whilst on their travel. When asked where buyers had bought fakes from, there was a marked increase in the proportion buying from 2006 whilst travelling in Europe (up 5% to 45%, leaving that as the second-most popular method of acquiring fakes), India (up 7% to 10%), China (up 7% to 8%) and the rest of the far East (up 7% to 19%). Brands point to the growth in fakes that are being bought abroad as the source of the problem of increasing counterfeiting. And if that wasnt enough, a quick search on the web and you will be inundated with a plethora of websites offering replicas of your favourite brands. For instance, a certain JK Louie has 15 years of experience in the fake Louis Vuitton designer handbags business and has a website www.voguebags.com to explore designer replica handbags.
Not to forget cities like Bangkok and Thailand, among others, which are thriving on the counterfeit culture. A walk in the local Sarojini Nagar market in Delhi can help you satiate a fashion addicts hunger for luxury goods. One can find all kinds of fake luxury goods strewn around. According to the International Anti-Counterfeiting Coalition (IACC), a group of brand-owning companies, the annual global trade in fake goods has risen to approximately $600 billion, from $5.5 billion in 1982. That accounts for 5-7% of world trade, the group says.
Not all find the spurt in the number of counterfeit luxury goods as causing damage to the big luxury brands. Ritson argues that for every negative incident in which a fake damages a brands reputation, there is an equal number of occasions where it helps protect the genuine brand. They help maintain a brands popularity and also create awareness about the brand. With fake luxury goods creating a flutter globally, brisk business is being done by web portals and agencies renting out these products and services to the growing population of luxury addicts.
Web portals such as www.bagsutra. com offer new designer handbags and help fashion bugs with the latest fashion trends at a fraction of the cost. The entire business is carried out with a lot of discretion as the first round of members are friends of the founder and the expansion of their base is done on pure referencing by that first tier. The annual membership fee is Rs 10,000 and the bag rentals are priced at Rs 1,000-2,000 per week. When I heard of companies renting out such bags for less than the cost of a bottle of champagne, I just latched on to the opportunity. It saves me a fortune and helps me fulfill my desires for a fraction of their full designer price tag, says Mala Kapoor, an advertising professional.
Several companies are offering rental schemes on everything from bags to yachts, diamond jewellery, sports or luxury cars and even custom-made clothes and holiday destinations. With MNCs making India their working destination, among other services, its the luxury car segment that has also drawn a lot of interest. Sunil Gupta, CEO, Avis India, a company that gives cars on rent, says the growth of inbound tourists has also contributed to the growth of the Rs 1,000-crore luxury car rental segment. In the past two years, we have seen an increase in the demand of self-drive cars among travellers going on a holiday, says Gupta. The rentals can go up to Rs 1,200 to Rs 8,000 per day, depending on the car category. Be it fake or on rent, luxury is easily up for grabs.