Global market review of counterfeit apparel - forecasts to 2014

Global market review of counterfeit apparel - forecasts to 2014

Counterfeiting is often viewed as a victimless crime that has little or no impact on the bottom lines of major apparel powerhouses. Indeed, according to some popular misconceptions, counterfeiting actually serves to stimulate trade, boost economies and spread the cachet of an already popular brand.

The reality of course, is very different.

According to estimates from the World Customs Organisation and the Organisation for Economic Co-operation and Development, approximately 7-10% of global trade is derived from counterfeit products. Revenues from these sales are growing at an alarming rate - by more than 400% since the early 1990s - and as a result, the International Chamber of Commerce believes that counterfeiting and piracy cost the global economy around US$492bn annually.

Learn more about the industry's growing counterfeiting problem, including its impact on the economy and how to combat it, with this comprehensive study by just-style.

As well as analysing the origins of counterfeit apparel, counterfeiter use and demographics, the report looks at how to recognise and stop counterfeiters, such as anti-counterfeiting strategies, available tools and solutions, and organisations that can help. We also provide key data and trends from 2005-2014 and review the latest brand positioning and market response.

Report coverage:

Brands can take the issue of counterfeiting into their own hands - by staying innovative and constantly changing offerings, an apparel company can stay a step ahead of counterfeiters. Following an executive summary, Chapter one reviews brand positioning, counterfeiter use and market response, such as entities at risk, brand goodwill and counterfeit warning flags.

If as much as 7% of global trade is derived from counterfeit products and that figure is growing, it is clear that the practice is not only pervasive but also highly networked. Chapter two looks at the global landscape of counterfeiting, including consumer attitudes towards counterfeiting and the major affected markets of Mexico, Brazil, US, and the EU.

In terms of overall quantities seized, China remains the main source for counterfeit goods, but the problem is far more widespread. Chapter three investigates the origins of counterfeit apparel, with figures showing the percentage of world share by country and percentage of seizures by type of infraction.

At the heart of any successful anti-counterfeiting strategy is a commitment by the brand to share intelligence between the company and enforcement agencies. Chapter four reviews these key strategies, including recognition of a problem and supply-side transparency.

Counterfeiting has grown at more than double the pace of the total apparel market over the last two years. Chapter five provides both historical and forecast data and trends for 2005 through to 2014, including comparisons between the total apparel market and counterfeit apparel market values, by clothing sector, for the regions of North America, South America, European Union, Asia and rest of the world

Despite progress by governments and industry on a variety of fronts, the scope and scale of the counterfeiting problem remained critical during 2007. Infact, available data suggests that the problem has only worsened in the first quarter of 2008. Chapter six looks ahead to the key counterfeiting trends for 2008 and beyond.

In extensive 2007 surveys by the US Department of State, the US government analysed companies that produce counterfeit apparel around the world. Chapter seven looks into counterfeiter demographics, revealing the findings of this survey and the motivation, marketing, and distribution trends behind the sale of counterfeit products. The effectiveness of existing laws and enforcements is also considered.

Chapter eight looks at further effects of counterfeiting on international trade and profiles organisations that can help affected companies tackle the problem, including the Global Anti-Counterfeiting Group and the International Trademark Association.

Chapter nine reviews the anti-counterfeiting tools and solutions currently on offer, including how they work, who supplies them and their efficiency. This chapter also provides statistics taken from a recent survey conducted by the IACC (International Anti-Counterfeiting Coalition).

Chapter ten offers a conclusion to the findings of the report.

Global market review of counterfeit apparel - forecasts to 2014

Executive summary

Chapter 1 Brand positioning, counterfeiter use and market response
Entities at risk
Brand goodwill
Counterfeit warning flags
Decreased sales
Customer complaints
New, unexpected markets

Chapter 2 Global landscape of counterfeiting
Counterfeit apparel seen as low priority
Consumer attitudes towards counterfeiting
Emerging markets
Mexico
Brazil
The US
The EU
Critical path toward minimising counterfeit apparel
Consumer-centric ways to beat counterfeiters

Chapter 3 Origins of counterfeit apparel

Chapter 4 Successful anti-counterfeiting strategies
Recognition of a problem and prompt action
Top-down approach
Working in partnership: 3M Thinsulate
Private resources
Supply-side transparency
Focused tactics

Chapter 5 Historical data and trends 2005-2014
Counterfeit-producing countries

Chapter 6 Counterfeiting trends in 2008 and beyond
China

Chapter 7 Counterfeiter demographics
Motivations behind counterfeiting and infringement
Marketing channels and sales price of fakes
Industrial distribution of counterfeits
Regional distribution of counterfeits
New characteristics of commercial counterfeiting
Counterfeiting and infringement evade legal bounds
New trends in the market distribution of counterfeits
Trans-national criminal groups export counterfeits
Reasons behind reincidence among counterfeiters
Evaluation of enterprises concerning enforcement by administrative and judicial agencies
National governments and law enforcement organs provide insufficient support to enterprises in anti-counterfeiting
Administrative law enforcement is inefficient
Local protectionism and the difficulty in getting evidence to support judicial punishment
Policy suggestions
Favourite modes of transport for counterfeiters

Chapter 8 Further effects of counterfeiting
Organisations that can help
The Anti-Counterfeiting Group (A-CG)
The European Apparel and Textile Organisation (EURATEX)
The Global Anti-Counterfeiting Group (GA-CG)
The Global Business Leaders Alliance Against Counterfeiting (GBLAAC)
The International Anti-Counterfeiting Coalition (IACC)
The International Trademark Association (INTA)
Interpol
The World Customs Organization (WCO)
The World Intellectual Property Organization (WIPO)
Investigative firms

Chapter 9 Anti-counterfeiting tools and solutions
IACC counterfeiting statistics

Chapter 10 Conclusion
Sources
Articles
Interviews
Other sources

List of figures
Figure 1: Reasons for consumption of fake goods 2005-2007
Figure 2: Reasons that would stop consumers from purchasing fake goods
Figure 3: Sources of counterfeit goods, 2007
Figure 4: US counterfeit consumption by age group, 2007 (%)
Figure 5: Counterfeit apparel country of origin (%)
Figure 6: Percentage of seizures by type of infraction (%)
Figure 7: Timeline showing impact of counterfeiting on genuine manufacturers, 2005-2014 (%)

List of tables
Table 1: Apparel market value by sector in North America, 2005-2014 (US$bn)
Table 2: Counterfeit apparel market value by sector in North America, 2005-2014 (US$bn)
Table 3: Apparel market value by sector in South America, 2005-2014 (US$bn)
Table 4: Counterfeit apparel market value by sector in South America, 2005-2014 (US$bn)
Table 5: Apparel market value by sector in the European Union, 2005-2014 (US$bn)
Table 6: Counterfeit apparel market value by sector in the European Union, 2005-2014 (US$bn)
Table 7: Apparel market value by sector in Asia, 2005-2014 (US$bn)
Table 8: Counterfeit apparel market value by sector in Asia, 2005-2014 (US$bn)
Table 9: Apparel market value by sector in the rest of the world, 2005-2014 (US$bn)
Table 10: Counterfeit apparel market value by sector in the rest of the world, 2005-2014 (US$bn)