Consumer education is paramount in combating counterfeit products
By Sa Nyoung Kim
Consumers are the biggest missing link in the fight against counterfeit goods. Yet they are highly exposed to the multiple risks associated with using fake products.
Globally, counterfeit and pirated products constitute a vast illegal enterprise accounting for 3.3 per cent of world trade, equivalent to half a trillion dollars annually. The International Chamber of Commerce estimates that the total economic value of counterfeiting could hit $2.5 trillion within this decade.
Research shows strong linkages between the trade in counterfeit and pirated goods and other serious transnational organised crimes like drug trafficking, money laundering and corruption.
A report released last year by the Anti-Counterfeit Agency highlighted the shocking prevalence of the counterfeit goods market in Kenya. Nearly 75 per cent of Kenyans use fake products and about a quarter of them knowingly purchase pirated goods.
Electrical and electronic appliances are among the counterfeited goods in the local market. Unfortunately, many consumers are not aware of the dangers lurking such as house fires due to malfunctioning electronic appliances.
The true cost of counterfeits is reflected in the negative economic and social effects of this illicit enterprise. For businesses, the cost is felt in the form of unfair competition, loss of jobs and market share, erosion of brand reputation, and eventual collapse.
For consumers, there are health risks, serious injury, death and accidents. Buyers are also forced to replace products at a shorter interval compared to the more durable genuine items.
For the government, there is loss of revenue, reduced foreign investment and insecurity since proceeds from trade in counterfeit products may be used to finance criminal activities.
Given this devastating impact on the economy, law enforcement agencies the world over have launched concerted action to combat this nefarious menace. Kenya is no exception as seen in the ongoing war on counterfeits.
Notable progress has been achieved although a lot more should be done especially in enhancing consumer education and awareness on the issue. This is part of brand protection strategies that companies can adopt to stem the vice.
It may also involve educating consumers about features that cannot be found on fakes as they are hard to copy due to the level of innovation by the company producing the authentic products.
For example, LG Electronics last year unveiled a mobile service platform to help consumers verify if they are buying genuine products by the company. This is part of a wider consumer education and awareness campaign known as ‘I Love Genuine’ launched by the company in support of the global fight against counterfeits.
We believe in working closely with our customers and other stakeholders in ensuring they understand the risks and true cost of using fake products. More importantly, empowering the consumer with the right information is a formidable weapon in winning this war.
Notably, knock-off products (those that imitate well-known brands but not labelled as such) are increasingly being sold online hence the need for heightened consumer awareness in the digital economy.
In a world where misinformation and ‘fake’ news is rife, there is need for robust online engagements with consumers to ensure they get accurate information.
Consumers also need to understand pricing as an important factor in determining the genuineness of a product. Most counterfeit goods are sold at a cheaper price to entice buyers into believing they are purchasing the original brand for a bargain which is not the case.
To be effective, consumer education requires a strong partnership between government and business in enlightening and informing the public about fake and sub-standard goods. This will underpin an inclusive approach at policy, advocacy and enforcement levels.
Pirated goods undermine innovation and lay to waste massive investments by businesses and brands in developing products that enhance the lifestyle of users. As such, the war on fakes should be accelerated so as to protect jobs, businesses and investments.
The media also has a role in highlighting the negative impact of this vice on consumers from a public safety and health perspective.
Consumers should also be encouraged to report unscrupulous traders selling pirated goods to the relevant authorities for action to be taken. This will act as a deterrent against those involved in the shady business.
All said, consumers should be guided by the time-tested wisdom that ‘cheap is expensive’ whenever someone tries to sell them a fake item.
Mr. Kim is Managing Director, LG Electronics East Africa