In this exclusive op-ed, RMIT University senior lecturer in marketing in the School of Economics, Finance and Marketing, Dr Marian Makkar reveals how Gen Z are fuelling a movement that embraces luxury knockoffs and the implications for high-end retailers.
Once upon a time, owning a counterfeit luxury item was considered a fashion faux pas. If consumers owned luxury knockoffs, the goal was to make sure others believed they were original; and most certainly consumers were not bragging about the money they saved or where they bought it from.
Unfortunately for luxury retailers and luxury consumers alike, the appetite for counterfeit luxury has grown. The total amount of counterfeit products sold globally each year is estimated at around $1.7 to 4.5 trillion, according to the US Patent and Trade Office.
Contrary to common thought that this is only a problem for other countries to deal with (e.g., United States), Australia is not immune. In 2022, around 160,000 items were seized by the Australian Border Force (ABF) with a value of approximately AU$60 million.
While selling counterfeits is illegal, it has become harder for the ABF and other organisations to target counterfeit shipments with the latest developments in counterfeit production; superfakes. It has become harder to decipher what is original from a superfake, especially when Australian retailers like Cosette, are allegedly selling them.
What has changed in the counterfeit world?
Luxury brands have long waged a battle against counterfeit goods. Designer knockoffs have been around for more than a century, having gained prominence in the 80s and 90s with logos becoming a status symbol.
With the dramatic improvement in the quality of fakes, the battle with counterfeit producers is tougher than ever. Today’s counterfeits are not the same as yesterday’s inferior quality knockoffs; they are highly sophisticated Chinese duplicates that can fool even the most trained eye, while selling for a fraction of the price. These high-quality, low-priced counterfeits are known as “triple-a fakes,” “line-for-lines”, and more infamously today as “reps” (short for replicas), “dupes” (short for duplicates), or “superfakes” by social media influencers.
The difference could be minor that only expert authenticators can verify–inside etchings or one less stitching than in the original.
You will not find superfakes sold in the streets of Bali. Chinese manufacturers have become increasingly skilled at replicating designer goods in such detail. These manufacturers are known to source leather from some of the same Italian suppliers as the fashion houses and often buy the real designer handbags to study how they are made.
Superfakes come with real luxury prices; they are just cheaper than the original. Due to their notoriety, superfake best sellers are not always easy to find, which makes them more appealing as an exclusive products.
The shopping culture is shifting
Gen Z are embracing a “dupe culture”. According to many social media influencers that helped fuel this luxury knock-off movement, buying dupes can support a lifestyle consumers would not have been able to afford otherwise. It has provided them with the thrill of bargain-hunting.
What is different in this era is the lack of furtive hush that once came with owning a knockoff. Dupe culture leans into pride that embraces fakes. Other Gen Z consumers rationalise dupes as a way to democratise fashion, especially in an era of rising inflation and economic concerns for young individuals. They even argue that buying superfakes is a way to knock off massive corporations like LVMH or Richemont. Influencers get to tell their followers about their impressive finds, and become the “Robin Hoods” of luxury for those on a budget.
Yet dupe influencers, as they are called, are also able to promote superfakes to a larger audience that can afford them and earn greater commissions from third parties like Amazon.
The result is that we are seeing more influencers using their social and cultural capital to create an acceptance around counterfeit items, making them desirable, and their young followers feeling savvy for buying them cheaply.
While it may not seem dangerous at first–given that superfakes are cheaper than originals and therefore not as financially impactful–there needs to be greater awareness surrounding the purchase of counterfeit items at a young age.
It is not a harmless purchase as many are led to think.
Why say no to fakes?
There are many reasons why consumers should not support counterfeits of any kind. Contrary to popular belief, counterfeiting is not a victimless crime. Consumers rationalising their knockoffs as innocent purchases is naïve as counterfeits in any form are illegal. It may seem harmless until they learn where their money is going. With the production and sale of superfakes, there is a chain of criminality and victimhood that is multilayered.
The sale of superfakes not only impacts luxury brands by violating their rights as trademark holders, but it also extends to small and medium retailers that do the right thing. It further harms consumers who might unknowingly purchase a product they might have thought was an original (but with incredibly low prices) like the consumer allegations made towards Cosette. Superfakes undermine intellectual property rights for everybody.
More significantly, there is much evidence that the manufacturing of fakes is connected to organised transnational criminal activity such as human trafficking, drug trafficking and slave labour. Workers are also likely to be paid poorly and work under harsh conditions. The popularity of superfakes harms legitimate businesses in Australia by contributing to an underground, illegal and unethical economy.
Dangers for young consumers
A critical issue that is not always acknowledged is that trends like superfakes and dupe culture create a slippery slope that can cost young people in the long run and contribute to addictive shopping habits.
Popularised by Gen Z influencers, superfakes are perceived as desirable and smarter choices over the original expensive brands. However, influencers themselves are spending more money on counterfeit items, such as Australian TikToker, Benjamin Luke Giles who spent $50,000 on fakes and admitted to his followers his addiction for buying clothes. Many of his followers (and other TikTok influencers) are young consumers that are learning how to make consumption decisions.
Like other addictions that may seem harmless at first (e.g., phone addiction compared to alcohol/drug addiction), superfakes, under the guise of their low price and high quality, exacerbate the lack of young Australian consumers’ financial literacy. They are being encouraging to spend more, while learning bad habits around money management and debt.
The rise of superfakes is what in social psychology is called “trickle-round effect” where fashion influencers adopt items associated with low-status groups (e.g., counterfeits). Social media normalises the trend with influencers using their social capital (followers) and cultural capital (image as trendsetters) to make superfakes the new luxury.
What does this mean for luxury retailers and Australian businesses?
From a financial perspective, superfakes are becoming a source of massive competition on a global scale. Luxury brands are concerned with both legitimate competition that captures market share and counterfeiters taking revenue away from them. As the counterfeiting industry continues to grow, it is expected that we will also see many jobs being lost, with the current loss of global employment at 2.5 million jobs, caused by counterfeiting.
From a brand reputation perspective, counterfeiting also influences consumers’ ability to trust brands in an open (and online) marketplace. With superfakes making it a lot harder to detect from originals, some consumers also do not see the reason why they should pay more for luxury goods when they have the option to buy the ‘same’ brand name and quality for less. For these reasons, it is incumbent on brands to protect their products, their image, and their customers from the rise of superfakes.
For instance, brands can work on creating awareness of the dangers of engaging with counterfeits products; produce authentication digital technology; or they can work closely with expert authenticators to help buyers verify their luxury purchases are not fakes.