New Delhi: Sales of fake luxury products may more than double to Rs.5,600 crore by 2015 as an aspiring class of Indian consumers scouts for cheap counterfeits of luxury labels that are sold by online retailers, according to a report released by lobby group Associated Chambers of Commerce and Industry of India (Assocham) on Tuesday.
The local market for fake luxury labels, including handbags, watches, sunglasses and perfumes, is growing at twice the growth rate of genuine luxury products, the report said.
Sales of counterfeit luxury products in India is growing at an average annual growth rate of almost 40-45% from the current Rs.2,500 crore, it said.
Globally the fake luxury products market accounts for 7% of the overall luxury market with an estimated value of over $22 billion of the global luxury industry worth about $320 billion. In India, fake luxury goods account for about 5% of the overall luxury market, according to a 2013 Assocham-Yes Bank Ltd study.
Goods made in China, which is the source of a bulk of the copies of coveted labels, are largely fuelling the demand for fake luxury goods in India, the report said.
“Over 80% of the entire imitation luxury products in India come from China,” D.S. Rawat, secretary general of Assocham, said in a statement.
Lack of transparency in online transactions is aiding consumers with easy access to such products, the report indicated.
Consumers who are not able to afford originals deliberately purchase counterfeits as global websites selling fake products ship them after receiving online payments. Most of these websites delivering fake luxury stuff in the country have their domain names registered outside India’s jurisdiction, the report said.
Demand for fakes is a manifestation that aspiration of a product does not meet affordability of the same, said Ankur Bisen, senior vice-president of retail and consumer products at consulting firm Technopak Advisors Pvt. Ltd. Consumers across income classes in India do not discriminate against buying fake products, he said.
“It’s not driven by a certain set of consumers who lack affordability but even those who can afford the original opt for fakes owing to desirability and awareness reflective of a value-conscious shopping behaviour.”