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$600 billion in losses every year! How counterfeit goods are destroying the U.S. economy?
Fake goods, a recurring problem in the market, are eroding the global economy, especially the United States, at an alarming rate. According to a report by the Organization for Economic Cooperation and Development (OECD), counterfeit goods accounted for 2.5% of global trade in 2019, with a total value of approximately US$464 billion. By 2030, sales of counterfeit and pirated goods are expected to reach 1.67 trillion euros (approximately 1.89 trillion U.S. dollars). This is undoubtedly a number that cannot be ignored.
"The problem of counterfeit goods is not only alarming in scale, but also a rapidly growing area. Now any product with a logo may become a target."
The impact of this phenomenon is all-encompassing, whether in the luxury market, such as designer handbags and watches, or everyday items, such as electronics and pharmaceuticals. Low-quality fakes not only deceive consumers, but may also pose risks to health and safety. Due to the low quality of counterfeit products, consumers often face disappointment and even risk health hazards after purchasing.
According to OECD data, counterfeit products accounted for 5.8% of EU imports in 2019. In the United States, the sales of counterfeit goods cause losses of up to US$600 billion every year, which affects domestic retailers, making it difficult for many merchants to survive, and ultimately leads to the shrinkage of the retail industry.
“Many companies spend millions or even billions to build their brands, only to be destroyed by Chinese fakes.”
China is considered the main source of counterfeit goods in the world, and even produces 80% of the world's counterfeit goods. The proportion of goods imported by the United States from China is also as high as 60% to 80%. This begs the question, are we unknowingly contributing to the spread of this phenomenon?
With the popularity of the Internet, the sales channels for counterfeit goods have become more and more diverse. According to a survey by the U.S. Government Accountability Office (GAO), 79% of the U.S. population shopped online in 2018, and many of the goods they purchased online turned out to be counterfeit. The way counterfeit goods are sold online makes these products appear to consumers as fake and real, further increasing the difficulty of cracking down.
"In online shopping, consumers often cannot tell the difference and buy many fake products. Many people are even deceived multiple times."
From luxury goods to daily necessities, from pharmaceuticals to cosmetics, almost all industries are affected by counterfeit goods. Especially for medicines, it is estimated that the annual revenue loss from counterfeit medicines is as high as US$217 billion. Criminal groups usually use counterfeit medicines to make profits, which poses a great threat to public health.
Take the fashion industry as an example. According to OECD estimates, brands such as Ray-Ban, Rolex, Supreme and Louis Vuitton are the most commonly imitated objects of fakes. Many consumers buy these fakes one after another based on their knowledge of the brand or the low price, which makes the market flooded with high imitations. Such consumption behavior not only weakens genuine brands, but also encourages the spread of criminal activities.
"The fact that the production of counterfeit goods often finances more serious criminal activities cannot be ignored."
In a 2008 report, the International Chamber of Commerce (ICC) estimated that the global value of counterfeit goods reached US$650 billion per year, and predicted that it may increase to US$1.77 trillion by 2015. This staggering increase undoubtedly represents the seriousness of the counterfeit problem.
Even though governments frequently crack down on counterfeit goods, they are still unable to effectively curb the development of this phenomenon. According to a 2017 report, 87% of counterfeit goods originate from China and Hong Kong, reflecting the region’s important role in the global circulation of counterfeit goods.
As the global economy changes and network technology develops, the problem of counterfeit goods may become more complex. Companies and brands have spent huge sums to deal with the problem of counterfeit goods, only to face growing challenges. When consumers choose whether to buy fake goods, do they consider the potential problems behind them?
In the current intensifying trend of counterfeit goods, how should consumers protect their shopping rights while not encouraging the growth and development of this behavior?
