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25% of Counterfeit Luxury Goods Are Sold Via eCommerce Portals

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So you are thinking of using ecommerce store to buy that exclusive Armani suit or Burberry bag? Want to gift your boss Caran d’Ache golden lined fountain pen through online shopping portals?

If you are wondering why these luxury goods are available for such a low cost online, then be prepared to hear the hard fact:

25% of all fake luxury goods which are sold in India are sold via eCommerce portals!

Globally, luxury goods market is worth $320 billion, out of which 7% constitute fake which is worth around $22 billion. Earlier this year, ASSOCHAM and Yes Bank conducted a study about counterfeit luxury products in India and found some startling facts. Indian luxury goods market is currently to the tune of $8 billion, out of which 5% or Rs 2500 crore is counterfeit.

ASSOCHAM has calculated that this fake luxury industry is growing at a compounded annual growth rate of almost 40-50% and within the next 3 years, it will become Rs 5600 crore.

But the most interesting find of the study was that 25% of these counterfeit luxury products are sold through online shopping websites.

DS Rawat, secretary general of ASSOCHAM said, “Many aspiring consumers who cannot afford originals deliberately purchase counterfeits as global websites selling fake products ship them once the transaction is complete.”

We decided to do some research into this, and found interesting information.

Lacoste, for example is a French clothing company founded in 1933 that sells high-end clothing, footwear, perfume, leather goods, watches, eyewear, and most famously polo shirts. We decided to search Lacoste products on online shopping sites. And on Rediff.com we found this.

lacoste Cotton Polo Tshirt Rediff

But Rajesh Jain, director and CEO, Lacoste India firmly says that Lacoste doesn’t sell Polo Tshirts online! He said, “Except for our perfumes and sunglasses, every other product branded as Lacoste and sold on any third-party website is a fake.” He warns, “Potential customers looking for genuine products need to be wary of such online offers,”

Besides Lacoste, other premium brands such as Louis Vuitton and Mont Blanc are also victim of such widespread counterfeit selling online. Mont Blanc pens being sold for Rs 1000 and Gucci perfumes available for Rs 1200 may seem a killer deal for a shopaholic, but unfortunately, they are fake.

Popular ecommerce portals such as Flipkart, Myntra, Jabong etc fortunately do not promote such counterfeit products on their platforms. In our research, we found that fly-by-the-night ecommerce portals having headquarters in offshore locations are more active in this fake sales.

But inclusion of Rediff in this list was quite shocking. Infact, on Rediff, it is not just one-off case; the rediff shopping site is filled with such fake products!

Arun Chandra Mohan, founder and CEO, Jabong.com said, “You will never find a fake product on our platform as all brands, including premium/luxury, are either sourced directly from the brand owners or their authorized distributors in the country. Selling authentic products is the key for our business and we pursue it very seriously,”

Reacting on this study, Amit Bagaria, founder chairman, Asipac Group (Bangalore-based shopping centre planning, development, leasing consultant and mall manager), shared, “Online shopping is helping the sales of fake products though it is largely done through e-retailers operating from international locations. You will rarely see an established Indian e-commerce platform selling a fake,”

As far as the solution to counterfeit luxury products is concerned, we really don’t have any answers. But it is being advised that buy such high end products only from reputed ecommerce portals and if the price difference is way too much, and seems too good to be true, then probably it is not true.

Always do a thorough and deep research about the prices of such luxury products and check the authenticity of the purchased goods from the website of the provider directly.

Have you encountered such fake luxury products online? Do share your story right here!

  1. Altaf Rahman says

    Nice article Mohul. I am old school guy and never buy anything online.

    I try to share some info I know. Lacoste has a manufacturing unit in Thailand (or a Third Party unit producing clothing for Lacoste on Order basis, which I dont remember). When I was working in Bangkok, one of my Philippino collegue had a side business of buying all rejects from the factory and shipping them to Manila. Offhand he was telling me that due to stringent Lacoste quality procedures a considerable quantity of rejects are generated and also as per Lacoste procedures, they need to be destroyed but some inside deal is struck and the good cloths which are rejected on some flimsy ground are shipped to Manila. My friend was telling me that the over-all quality of the rejects is still good and low end people get to wear Lacoste at cheaper prices and the name of Lacoste is also not tarnished. When I asked him is his business eating into Lacoste business, his answer is more convincing. He said, Lacoste in original form is for high end people. Only the low end people buy his Lacoste rejects, so his conviction is that the rejects are not eating into the market for which Lacoste intended their products.
    The above is only about the rejects of the original coming into the market. With my friends explanation, I call this a grey area.
    May be there are many more people who are producing fakes with Lacoste brands and cheating high end people. This is not grey anymore. Its black and white.

    1. Arun Prabhudesai says

      Interesting real life insight Altaf… thanks for sharing..

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