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What to Know About Counterfeiting When Running a Fashion Business

4 Mins read
  • Your clothing business cannot afford to be cavalier about the risks of counterfeit clothes.

Are you running a fashion business? We mentioned that it could be a great type of company to launch during the pandemic. However, running a fashion business is not going to be easy.

There are a lot of issues that you are going to have to keep in mind. One issue that you might not have thought about when you first launched your company was the risk of running into counterfeit products.

Dealing with Counterfeiting When Running a Fashion Company

Running a fashion business is far from easy. You have to regularly keep up with recent trends, monitor your cash flow, work with influencers to help promote your fashion and deal with frustrating customers. You also have to think about investing in new technology like this company did. One of the last things that you are probably thinking about is counterfeiting.

Unfortunately, counterfeiting is a very real problem. Your fashion business could be at risk if you don’t carefully address the risk and have the right controls in place.

Counterfeiting is a well-known problem in the fashion industry, but it is tough for big brands to tackle it alone. Creating fake clothes is as easy as copying, pasting, and printing is unlike many other sectors. Many people buy into fake brands if they cannot afford the real ones, and counterfeiting happens in back streets, secret shops, and many places abroad. With technology making counterfeiting more accessible than ever, it has never been a bigger problem for the fashion industry. Below we look at some of the reasons why.

Facts and Statistics

Before we look at why counterfeiting is such a huge problem, it is helpful to go over some facts and statistics. China is one of the biggest manufacturers of counterfeit products, but this is now closely followed by other large countries, such as Pakistan, India, and Mexico. The brands that are hit the hardest are the most high-end brands, like Louis Vuitton, Rolex, and Gucci.

By 2022, the counterfeiting industry worldwide has been forecast to make $4.2 trillion, making it a massive problem for fashion labels trying to make money and keep their products on the shelves. Social media makes this problem worse, with around 20% of all fashion products sold and promoted through these platforms being fake. This makes it worse for the buyer, too, as some people fall for these deals, putting their hard-earned cash towards a counterfeit brand.

Perhaps one of the most brutal statistics to swallow, in 2020, the fashion industry lost out on over $50 billion because of counterfeiting. Clothing manufacturers were hit the hardest with this, followed by personal care and makeup, jewelry and watches, and luggage and handbags.

Societal View

Unfortunately, buying fakes is seen as a usual practice in most places worldwide, making it such a big industry. Buying a fake can be seen as the best alternative for those who cannot afford the real thing. Mostly, people are not aware of how this affects the brand and how fast fashion is bad for the fashion industry and the environment. Some people turn to fakes as a way to fit in, with social pressure being a common reason for counterfeit purchases.

Not everyone is a supporter of fakes, though, with many people preferring to not buy counterfeit products. In general, fake products do not last as long, are made from poor materials, and do not look the same as the brand. With fast fashion being typical in this modern era, we are less likely to consider where our clothes come from and what impact this has on others.

How Do Counterfeit Products Affect the Fashion Industry?

Counterfeiting can be bad for everyone, not just the fashion labels. With so many counterfeit products for sale, fashion labels can struggle to keep up employment rates, with an estimated 2.5 million jobs around the world lost due to counterfeiting. Although those who sell counterfeit goods may hire staff, this is not likely to come with the same wage, health plans, and security. It is also illegal to create counterfeit products, which is not a legal job.
Counterfeit products lose the fashion industry money year after year. This is one of the most apparent reasons counterfeiting is such a huge problem. Many fake products are sold legit, meaning that buyers are sometimes not aware that they are buying a fake. This is bad for the industry and just as bad for the buyers, who are putting money into a fake product.
Fake products are also harmful to your reputation and can cause damage to your business. If you were to purchase a fake branded product and it turned out to be made poorly, you are likely to blame the manufacturer, even though what you have bought has come from somewhere else. Fake products are often made cheap so that they can be sold for a big profit. A bad review left online could cause severe damage to brand reputation.
Counterfeit goods also hurt the artist or the creator of the products. They have worked hard and tirelessly to create a product that they are proud of, only to have a fake product on the street the day after release. This means their creative work has been stolen, which is frustrating and disheartening.

Protecting Your Fashion Business from Counterfeiting

Although counterfeit products are a massive problem for the fashion industry, this does not mean there are no increasing measures to stop this from happening. One way to make sure the reviews left on your website are from buyers who have bought your items is by ensuring that only verified buyers can leave a review.

Ask your customers to be aware of fake products and inform you if they find your products sold anywhere else. You can also use a label system, such as Diagraph printers. Diagraph have created printers that allow you to create one-to-one label-product match, meaning each product label is traced, and counterfeit products can be sniffed out much more manageable. Another way to keep your business safe is to patent, copyright, or trademark your goods.

Although counterfeiting is a huge problem in the fashion industry, the issue is being tackled. The more people who know about the problem and its effects on companies and people, the more can be done.

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About author
Ryan Kh is a big data and analytic expert, marketing digital products on Amazon's Envato. He is not just passionate about latest buzz and tech stuff but in fact he's totally into it. Follow Ryan’s daily posts on Catalyst For Business.
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