How Luxury Brands Can Beat Counterfeiters
For years, the luxury industry has waged a battle against counterfeiters. It has invested heavily in ultra-sophisticated tech solutions which use the latest advances in nanotechnology, internet of things (IoT), and AI to authenticate products. It lobbies governments to extend enforcement bodies’ powers to seize and destroy fake goods, to prosecute buyers and dealers, and to block access to websites that sell counterfeit goods. And then there are the lawyers: LVMH alone employs at least 60 lawyers and spends $17 million annually on anti-counterfeiting legal action. These efforts are not paying off. The total trade in fakes is estimated at around $4.5 trillion, and fake luxury merchandise accounts for 60% to 70% of that amount, ahead of pharmaceuticals and entertainment products and representing perhaps a quarter of the estimated $1.2 trillion total trade in luxury goods. Digital plays a big role in this and perhaps 40% of the sales in luxury fakes take place online, as today’s counterfeiters milk the ubiquity and anonymity of the internet space to the last drop. For every e-commerce platform like Alibaba that cracks down on fakes, a new one emerges that allows goods to be shipped directly from manufacturers. Read more at Harvard Business Review.
