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NEW DELHI : New Delhi

Shoppers looking to snag a luxury timepiece may be tempted by the allure of cut-price products being sold online: a Tag Heuer Mercedes Benz SLR watch, which typically retails at 4.72 lakh, can be purchased for as little as 2,500, and an Apple Watch paired with the latest AirPods can be found for just 2,999. But bargain-seekers beware: these are fakes that rob luxury brands of sales and the government of tax.

Besides, these counterfeit products are being promoted by several Indian social media influencers with impunity.

Counterfeit luxury products have long been a problem in India, but the peddling of fake items has become more open of late, with little pushback from brands and enforcement authorities. This has resulted in the proliferation of fake products that are often hard to distinguish from the originals, making it increasingly challenging for shoppers to make informed purchases.

While most listings of luxury products do not make it to popular e-commerce platforms, a counterfeiter manages to sneak in every now and then. Take, for instance, the seller who runs ShoesKartel. It is retailing, in its catalogue of hundreds of so-called branded products, such as Adidas’ Neo Entrap’ shoe, which otherwise costs upwards of 10,000 for just 2,500. When Mint contacted the seller on Whatsapp about the product’s origin, he said these were “imported replicas". The same seller is also selling products on online B2B marketplace IndiaMart. Most of these fakes are making their way from China.

India has become a thriving market for counterfeit luxury goods, with social media influencers contributing to the proliferation of fakes, promoting websites that openly sell and advertise them.

Copies or fakes also come with rankings. Copies of big brands like Rolex can be numbered anything from 10A, 9A, 7A, 6A, 5A, etc. If it’s a 12A, it’s the highest quality of copy, while 1A is the lowest.

First Copy Club sells everything from fake luxury sunglasses to bags to gadgets and claims most of its products are a 10A copy. This website sells everything from copies of luxury perfumes, such as Burberry, Givenchy, and Giorgio Armani, to sunglasses, belts and accessories from companies like Hermes, Gucci, Versace, Balmain and others.

ClassyShopper.selloship. com, which sells everything from luxury sunglasses to perfumes and jackets, claims to have an address in Surat, Gujarat and bears a tagline “Made with love for India". However, in small print, it says that products are imported and are not sourced from official representatives of the brand in India and don’t carry a warranty.

The absence of a specific law that allows the government to remove websites selling counterfeit products is a challenge for luxury brands. However, existing legislation addresses such cases, but implementation remains a challenge as it primarily targets the source of the counterfeit, not its sale.

Lawyer Safir Anand said online counterfeiting and endorsement of fake products by social media influencers have proliferated exponentially in recent years and is a menace that needs to be controlled. The consumer protection e-commerce rules mandate that substantial information about the products or vendors must be made available on the seller’s website for the consumer to make an informed buying decision. There are also laws which provide legal protection to brand owners against counterfeiting and infringement of their proprietary rights.

Rahul Prasad, managing director (Asia-Pacific and Middle East), Pike Preston Partners Ltd, a boutique advisory firm that deals with mergers and acquisitions in the fashion and luxury segments, said there is a good example in the European Union, Japan and South Korea, where if an individual is importing, carrying or buying counterfeit products, either physically or on e-commerce platforms, they can be liable for a fine regardless of what the source of the product is.

Globally, luxury shoe brand Birkenstock which was purchased by LVMH, recently announced in 2016 that it would not sell on Amazon because of counterfeiting.

One firm that deals in the business of identifying counterfeits estimates that the luxury counterfeit market has led to a loss of at least 1 trillion to the Indian economy. Globally, this figure is estimated to be around $3 trillion. E-commerce has proliferated counterfeited goods, and greater internet penetration has fuelled the rapid increase in fake merchandise.

Many brands whose products are faked place a high value on their intellectual property and are using tools to identify and take legal action against those who promote counterfeits, said Vikas Jain, founder and CEO at Acviss Technologies, a company that helps identify such products being sold online.

But the challenges are aplenty. While online counterfeit dealers are hard to find, and even if they are identified, flagged and removed, they could just as easily start a new website or account.

They also use social media to boost their sales, which ordinary customers won’t be able to distinguish from the original. But because the legal system is easy to evade, influencers feel that the benefits of such activities outweigh the risks.

The other issue is that these products are not categorized at the same level as the original products, which means they don’t pay the tax the real brands do, leading to tax evasion.

ABOUT THE AUTHOR

Varuni Khosla

Varuni Khosla is a journalist with close to 14 years of experience in writing business news stories for mainstream newspaper companies like Mint and The Economic Times. She reports and writes on luxury and lifestyle brands, hospitality and tourism news, the business of sports, the business of advertising and marketing and alcohol brands.
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