The counterfeit industry has long been the shady brother of legitimate, high-end manufacturers. Conventional knowledge says fakes steal sales from genuine brands, but could they actually be good for business?
A preliminary study of counterfeit sales in China (the birthplace of all these fine products) suggests that rip-offs may serve some good after all.
In the 1990s, China suffered a bout of well-publicized cases of food-poisoning and gas tank explosions. As policing efforts were diverted from counterfeiters towards the drug, food, and gas industries, knock-offs proliferated. Instead of losing business, however, high-end labels saw rising sales in the following years.
There might be several reasons for this:
Imitation may be flattering, but it’s so much better when it’s also profitable.
A preliminary study of counterfeit sales in China (the birthplace of all these fine products) suggests that rip-offs may serve some good after all.
In the 1990s, China suffered a bout of well-publicized cases of food-poisoning and gas tank explosions. As policing efforts were diverted from counterfeiters towards the drug, food, and gas industries, knock-offs proliferated. Instead of losing business, however, high-end labels saw rising sales in the following years.
There might be several reasons for this:
- Fakes serve as free advertising by signaling brand popularity. All publicity is good publicity, right?
- Owning a fake could eventually lead to purchasing the real thing. MIT marketing professor Renee Gosline calls counterfeits “gate-way” products that allow the owner to form an emotional attachment to the brand.
- A guilty conscience helps propel counterfeit owners to buy the genuine article.
Imitation may be flattering, but it’s so much better when it’s also profitable.
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