Counterfeiting, not so harmful to luxury brands?

Should we still be wary of counterfeits? From a theoretical point of view, they would not only have negative effects. At least, according to the demonstration of a team of researchers from British Columbia universities in Vancouver, Chengdu and the NYU branch in Shanghai, published August 20 in the American economics journal Marketing Science. As a result, in the face of little or no sanctioned counterfeiters, brands are driven to improve the intrinsic qualities of their products in order to preserve their competitive advantage. Certainly, a simple empirical observation verifies this intuition. Still had to measure it.

What these researchers have tried to do by peeling including twelve years of financial reports of thirty major brands of shoes. They are confined to emerging markets, especially China, where counterfeiters are arguably the most active in the world. Their calculations include prices and the level of distribution of copies to consumers not necessarily aware that they buy fake precisely.

Counterfeiters, innovate

Of course, legal competition is also supposed to stimulate innovation. But counterfeiting "differs from other forms of competition", take care to specify the authors, Yi Qian, Qiang Gong, Yuxin Chen, not only because the investments of counterfeiters are weaker because they are content to copy models, but also because, precisely, customers are not necessarily able to distinguish between the false and the true, an asymmetry of information thatcan worsen competition and unconventionally influence the marketThey are trying to make sure they buy "real" models, and consumers would be much more picky about proofs of authenticity.

And these famous proofs, it is above all in the same product that they seek them, much more than via other sources of information on the value of the product. As the price for example, which in luxury is supposed to signal a high level of quality, so be a guarantee of authenticity.

Even distribution networks are no longer a pledge of confidence, buyers in China sometimes refusing to visit the "official" stores for fear of falling on fake. This partly explains why Chinese consumers tend to make luxury purchases abroad, especially in Europe. The authors even cite cases of store managers in China deceived by the similarity of the models presented by subcontractors.

Verifiable and sustainable

In support of their thesis, the authors distinguish two types of qualities that make it possible to confer value on the product: those that are immediately verifiable, such as finishes, materials, design. And those who have experience (shock resistance, durability over time).

In the case where the counterfeits are rare for a given type of product, the marks "are encouraged to improve the quality of the experience to attract more expert consumers"In the one where copies are legion, it is for brands to improve the" verifiable "qualities of the product in order to stand out.It appears in passing that the" verifiable qualities "also tend to serve proof that the product is also endowed with "durable" qualities.

Auto correction

Notable fact: this long survey published in several time since 2013 is based on the assumption of a self-regulation of the market that "Automatically corrects the negative effects of counterfeiting".

"Although potentially costly for producers, this effect on innovation may actually be positive for the consumer in the fashion industry", says one of the researchers, Yi Qian." We know that there are fake ones. And yet sometimes the most effective solution is to let the market regulate itself since it can lead to better products, "she says.

The latter recognizes, however, that this positive impact is not true in all sectors. In the case of pharmaceuticals, counterfeiting is instead an incentive toinefficient innovations"she says at La Tribune, because she would tend to push the copied brands to spend their research and innovation on" aesthetic "(taste, packaging, marketing) more than on the product If that is obviously much more serious than in the case of a pair of shoes.

26 billion euros

Other negative aspects of size are swept away. Starting with the fact that counterfeiting is a means of financing mafia and criminal networks.

Not sure at last that this research reconciles luxury homes with their old pet peeve. For apparel and accessories alone, the direct loss of revenue for the "official" industry would be € 26 billion per year in Europe according to the Office for Harmonization in the Internal Market (Ohmi). Including the impact on suppliers, the figure climbs even up to 43 billion euros. As an indication, the top 100 global luxury companies generated over $ 214 billion in revenue in 2013 according to Deloitte figures.

>> To read also: Counterfeiting: the battle of the giants of the Chinese e-commerce for their reputation