August 9, 2022

Spot the difference: the invincible business of counterfeit goods

Iwas standing in front of an imposing townhouse in the swish 16th arrondissement of Paris. Its classical lines, marble staircases and delicately wrought iron balustrades belied the fierce sense of purpose inside. The Musée de la Contrefaçon is an unusual kind of museum – it specialises in counterfeits. I hoped that my visit would help me understand a problem that luxury brands have been battling for decades: that of mass-market knock-offs and blatant counterfeits.

According to some estimates, the trade in fake products is worth $600bn per year. As many as 10% of all branded goods sold may be counterfeit. It is estimated that 80% of us have handled fake or falsified goods (whether wittingly or not). Sales of luxury goods have soared in recent decades, but fakes have grown even faster: one estimate suggests that counterfeits have increased by 10,000% in two decades.

It’s not just the overall figures that boggle the mind. One French customs raid confiscated enough fake Louis Vuitton fabric to cover 54 tennis courts. A swoop on a seller on the online Chinese shopping platform Taobao netted 18,500 counterfeit bags, aprons and footwear. A bust in Madrid impounded 85,000 counterfeits ready for the Black Friday and Christmas markets. In Istanbul, in 2020, almost 700,000 counterfeit haircare products were seized.

Usually, when there are many more counterfeits than the real thing, you see a correction of some kind. But despite the growth of an authentication industry with an ever-expanding list of anti-counterfeiting tools – thermally activated tamper-proof seals, security numbers, RFID (radio frequency identification) tags, colour-shifting inks, holograms – that doesn’t seem to be happening. I wanted to make sense of this discrepancy. Why can’t the designers and the big brands stop, or at least slow down the counterfeiters? And how do you tell the difference between the real thing and the fake anyway?

In the Musée de la Contrefaçon there is a typically French answer to that question: glass vitrines displaying products and their counterfeits side by side, helpfully labelled vrai and faux. I looked at what seemed to be the famous quilted 2.55 Chanel handbag. In fact, the tour guide told me, it was a Turkish-made knockoff. Where the original boasts regular and robust stitching, the fake was glued together. The signature quilting was made of cardboard and cotton wool. At first sight, a Korean bag looked just like a Louis Vuitton; on closer examination, I noticed that the distinctive trefoils had been replaced by a circle and a bar, the LV logo by some superficially similar characters in Hangul, the Korean alphabet. Not a single element of the design matched the original, yet the overall effect was unmistakably “Vuitton”. The guide explained that this illustrates the difference between fakery by imitation and fakery by “passing off”. Another cabinet held a 2,000-year-old Gaulish fake of a Roman amphora; what should be a Roman name on the stopper was replaced by random symbols. I got the feeling that the museum staff were quite proud that their oldest fake was made on French territory.

Rather unstylishly, I was carrying my notebook, wallet and keys in a supermarket plastic bag. Leaving the hotel earlier that day, I had realised at the last minute that my shoulder bag was a fake Longchamp. In the museum the guide showed me the real thing. On mine, the little gold tchotchke that hung off the zip was a plain gold ring, where it should have been a leaping Longchamp horse and jockey. The inside of mine lacked the deliciously thick, rubbery, almost sticky quality of the genuine article. Compared to the real thing, the leather on my bag was oddly spongy and insubstantial, the stitching inadequate.

I asked the guide about the building. Was it true that it was a copy of an earlier 17th-century one in the Marais district? Did that mean – oh, the delicious irony – that the museum was itself housed in a counterfeit? The guide’s eyes narrowed slightly. I sensed a froideur. “It’s a copy, not a counterfeit. Where there is no IP, no counterfeit is possible.”

The Musée de la Contrefaçon specialises in luxury fakes, but the explosion in counterfeiting over the past two decades has mostly taken place in the mid-market. Brand knockoffs that used to be sold on market stalls are now just a couple of clicks away on the internet. The products most affected are those known in the unlovely jargon of marketers as “masstige” products (combining “mass market” and “prestige”): goods that are premium but still affordable. No clear line separates these from luxury goods, but instead of emphasising craftsmanship and tradition, superior quality and exclusivity, masstige goods sell themselves on artisanal touches, wish fulfilment, celebrity association and trends. As one commentator puts it, masstige focuses on aspiration, “the implicit distance between the world they [the brands] represent in their communications and the product their consumers can actually afford to buy”.

Earlier that week, in Amsterdam, I met Bjorn Grootswagers, regional director of the anti-counterfeiting organisation React. React has 30 years’ experience fighting the counterfeit trade. It handles around 20,000 cases a year, working with customs and law enforcement agencies across 107 countries. Its 300 or so clients are a roll-call of the world’s most powerful rights owners, many of whose products fall into the masstige category: Adidas, Abercrombie & Fitch, Converse, Nike, Puma, Levi’s, Tommy Hilfiger, Fifa, Ducati, Jack Daniel’s, Jaguar, L’Oréal, Procter & Gamble, Unilever, Warner Bros, Yamaha, PlayStation, Hello Kitty, Playboy.

As the taxi taking me from the station drove along the Amstelveenseweg boulevard, office towers turned into blocks of flats, and then into smaller and smaller terraced houses.

The driver asked me why I’d come and sounded unimpressed when I told him. “Why fighting fakes in Amsterdam? They don’t make them here. I am from Turkey,” he said proudly. “And we make many!”

We came to a halt outside a two-storey, sharply gabled house. In the front parlour, which serves as a meeting room, I was plied with extremely good coffee by Grootswagers and his colleague Mary-Ann Kouters. The shelves to my right overflowed with the sort of knockoffs you might see on a stall on Oxford Street in London: polyboard squares holding about 50 diamante stud earrings in the shape of Chanel’s double C, a floppy stuffed Paul Frank Julius monkey, plastic purses with garish multicolour LV logos. Boxes of fake Ariel washing powder stood alongside an unopened four-pack of Braun Oral-B electric toothbrush heads – indistinguishable from one I’d opened that morning.

Twenty-five years ago, when the company started, Grootswagers said: “If we stopped 5,000 fakes a month we thought we were doing a good job. If we caught 100,000 a year, we would pat ourselves on the back.” He smiled. “Then we changed what we did, and now we are stopping 25m counterfeits a year.”

React used to inspect the markets and shops where fakes are sold. Now they monitor the points at which bulk consignments of counterfeits enter the EU – container ports such as Rotterdam, Antwerp and Bremen. One shipping container can hold a thousand times more than a smuggler’s suitcase. Pick the right port, the right ship and the right container, and you can stop tens or even hundreds of thousands of fakes in a single swoop. But it’s not easy. Around 180m shipping containers whizz around the globe each year, 15m of which pass through Rotterdam. Grootswagers and his colleagues have to pick out which of these identical containers might be storing counterfeits and ask customs officials to wheel the giant box off the ship to see if they are right.

For obvious reasons, Grootswagers couldn’t tell me too many of the clues and techniques he uses to spot potential fakes, but he says he often finds himself flagging up what’s not there, rather than what is. If it just says “shoes” on the list of a ship’s cargo, that’s suspicious, he told me. “Because if it’s Nike shoes it would say Nike, and if it’s Adidas it would say Adidas. Most of the counterfeit goods come from Asia, mostly China, and we have a blacklist of factories of course. We’re often looking at shipping agents rather than factories, and they change their names all the time. They’re called things like Unit 1234 and it’s all in Chinese characters, but sometimes there are giveaways – say, if the address is on a third floor. Well, you can’t ship from a third floor, can you?”



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