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Report: Sales of Counterfeit Reproductions Set to Increase Worldwide

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Counterfeit in a room hidden from the public area of a popular shopping center in Beijing, China, March 11, 2015.
Counterfeit in a room hidden from the public area of a popular shopping center in Beijing, China, March 11, 2015.

A new report predicts a rise in counterfeiting and pirated goods over the next ten years.

The report says China has been at the center of copying goods, from clothes to electronic devices, and medicines to beauty products.

It says governments and businesses are working to stop the illegal and unapproved copying of products, and protect companies and jobs.

The International Trademark Association and the International Chamber of Commerce published the report in February. It estimated the value of counterfeiting and piracy worldwide could reach $2.3 trillion by 2022. In 2015, the value was $1.7 trillion.

The research company Frontier Economics prepared the report. It said social, investment and criminal enforcement costs could increase the total cost of counterfeiting and piracy to $4.2 trillion. It said that would put about 5.4 million jobs at risk.

Counterfeiting and copied goods have always existed. But the increased flow of trade across borders has sped up the production and sale of fake products.

The United Nations Office on Drugs and Crime, or UNODC, noted recently that “counterfeit goods and fraudulent medicines pose a serious risk to public health and safety.”

Many everyday goods are manufactured without the knowledge or permission of their owner. Examples can include car supplies, chemicals, electrical supplies, food, drinks and agricultural products. Deaths and sickness have been reported from fake baby-milk powder in Asia.

The UNODC and the World Customs Organization estimate 75 percent of counterfeit products seized worldwide in 2010 were made in East Asia.

John Houston heads the YPB Group, a product security business based in Australia. He says the counterfeiting problem is centered in China.

“The Chinese counterfeiter can now copy the best packaging, they actually put holograms on things that the original brand owner doesn’t have a hologram on, to create the aura of authenticity,” Houston said. “So what you need is a traceable, identifiable, authenticable technology in products and you would be absolutely amazed how little there is in the world.”

The UNODC says India and China are the largest sources of counterfeit medicines. It says 60 percent of counterfeit medical products seized worldwide come from China.

Chinese officials are working to stop the manufacture of fake medicines. But as they do so, manufacturers are moving to other countries, such as North Korea, Myanmar and Vietnam.

The major reason for the increase in counterfeiting is the rise of the internet and online sales. In December, the United States government placed the China-based Alibaba Group on a counterfeit goods “watch list.” Since then, Alibaba has announced steps to stop the sale of counterfeit goods. And it called on Chinese officials to pass stronger laws and take other actions to stop the manufacture of counterfeit goods in China.

The company said China’s “ambiguous counterfeiting laws” harm companies’ ability to fight counterfeiters.

Alibaba cancelled 380 million product listings and closed 180,000 stores on its websites. It also barred 675 companies from selling on their sites.

Some governments help fight counterfeiters. Thailand often carries out raids on counterfeiters and publicizes the destruction of fake goods.

Cambodia is dealing with problems from fake medicines. The Interior Ministry recently said it had closed more than 60 illegal pharmacies and had taken steps to stop the production of fake currencies.

Vietnam’s Health Department of Medicine Management has been dealing with a flood of counterfeit beauty products. It has suspended sales of more than 30 such products. Businesses in Vietnam have reported that fake products from China were costing them “hundreds of thousands of dollars each year in lost revenue.”

Houston said there is increasing demand for technologies to help stop counterfeiting or illegal manufacturing.

The website MarketsandMarkets.com said the value of anti-counterfeiting packaging is set to reach $153 billion by 2020. In 2015, that number was $82 billion.

Houston said Asian governments are considering using the anti-counterfeiting technology because they understand “the burden and loss of revenue that counterfeit and the black economy place on developing economies.”

Correspondent Ron Corben reported this story from Bangkok. John Smith adapted the report for Learning English. George Grow was the editor.

We want to hear from you. Write to us in the Comments Section, or visit our Facebook page.

Words in This Story

counterfeit – v. to make an exact copy of (something) in order to trick people

pirate – v. to illegally copy (something) without permission

fake – adj. meant to look real or genuine but not real or genuine

pose – v. to be or create (a possible threat, danger, problem, etc.)

packaging – n. material used to enclose or contain something

hologram – n. a special kind of picture that is produced by a laser and that looks three-dimensional

aura – n. a special quality or feeling that seems to come from a person, place, or thing (usually + of)

authentic – adj. real or genuine; not copied or false

trace – v. to follow (something) back to its cause, beginning or origin; to find out where something came from

ambiguous – adj. able to be understood in more than one way; having more than one possible meaning

revenue – n. money that is made by or paid to a business or an organization

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