The Global Impacts study conducted by Frontier Economics estimates the total global economic value of counterfeited and pirated products at $650 billion every year. Counterfeiting accounts for approximately 10% of the world’s trade and research has shown that the illegal practice has caused a loss of a quarter of a trillion dollars in the U.S. alone (Boonghee & Seung-Hee, 2009).
This month the fashion world witnessed Sports Luxe pioneer Alexander Wang go toe to toe with fashions biggest problem and win. Vogue reports that the designer successfully sued over 45 defendants operating 459 websites selling illegitimate goods bearing the Alexander Wang moniker. Despite being awarded a cool $90 million in damages, it’s unlikely that the brand will see anything close to that figure due to the impossible nature of tracking down the sources behind the illegal trade. The ruling is seen as more of a symbolic victory for the fashion industry as a whole who in recent years has tried and failed at fixing its counterfeiting problem.
Last year we saw big name brands including Gucci and YSL resort to mediation talks after suing Alibaba for promoting the sale of counterfeits (Reuters). When the Wall Street Journal quoted Alibaba executive chairman and founder Jack Ma as saying that “the fake products today are of better quality and better price than the real names” many wondered whether fashion’s counterfeiting problem was ever going to be taken seriously. The Alexander Wang ruling is certainly a step in the right direction however the real power lies in the hands of the consumers. What method will work to deter consumers from purchasing cheap knockoffs, the carrot or the stick?