Fake brands at throwaway prices!

The counterfeit trade, though an offence in the UAE, is thriving behind the remote-control operated shelves in some markets and shops in the country. Officials, stressing they are doing their best to check such violations, say agents need to be alert too.

Karama's shopping area is one of the popular destinations for women, both residents and tourists, aspiring to avail of branded products. It is a hub for knock-offs of luxury fashion brand accessories such as purses and handbags, belts, sunglasses, watches, perfumes, and tee shirts among scores of others. Customers can walk out with a fake Louis Vuitton, Gucci, Chanel and Christian Dior product at very cheap prices.

While the local authorities are taking stringent measures to control this underground trade by raiding the shops, confiscating fake products and slapping hefty fines, they feel that it remains the responsibility of the sole agents of the brands to monitor the market and report such violations to the authorities.

It, officials point out, is part of their commitment to the brand owners who trust them with the marketing of the brands and the protection of their trademark rights.

"The Dubai Department of Economic Development (DED) can't control this phenomena without the support of public, agents, and owners of trade marks. Foolproof precautions need to be taken to prevent the tampering and duplication of important products," Mohammed Hilal Al Muroshedi, Director of Compliance Division at DED told Khaleej Times.

He stressed that it is the responsibility of the agents to monitor the markets and report violations of trademarks to the authorities. "We conduct our regular checks of the markets, but tip-offs can help us control the phenomenon better," he said.

In an interview with Khaleej Times, Angelica d'Andlau, PRO Manager, Euro RSCG Promopub, who is in charge of Chanel and Louis Vuitton products in the UAE, said the agent was aware of this problem for some time now.

"We know that there are goods that carry the name of Chanel but they are not manufactured in the UAE. They are produced somewhere in Asia and sold in UAE markets such as Karama among many other places in Sharjah."

She added that the phenomenon was noticed five years ago. "It was then when we found that there are fake products of our brands."

However, Ms D'Andlau, who was recommended to KT for comments, by the brands' agent Chalhoub Group (cited as "the only authorised person" to talk on behalf of those brands), played down the impact of such trade on the sale of genuine, reputed brands.

She said: "It has no impact at all because the customers of the original products of Chanel, for instance, will be able to differentiate between the real and fake ones. Our customers belong to the upper class of the society and are ready to pay the price for genuine, expensive products", she said.

She added that the trade in brand knock-offs doesn't affect or jeopardise the image of the brands, which are of high quality, while fakes are cheap commercialised goods that do not last long.

"Handbags from Chanel or Louis Vuitton are not being sold at four or five hundred Dirhams. They are so costly and a branded original handbag costs between Dh 5,000 to Dh6, 000 which, in fact, is not available for everyone."

Replying to a question on complaints received about their fake products in the market, she said: "We have never received such complaints, because as I said, we have special customers who go directly to the agents of our brands."

D'Andlau said we are not responsible for those who are cheated when they buy the fakes from behind the doors. They will be solely responsible for their behaviour.

In the same breath, she however spoke also about the measures they would take against those dealing in fake products carrying the names of their brands. "In fact, legal action is taken by the main office in Paris and they have appointed lawyers all over the world to handle such cases in coordination with the departments concerned in the respective country and of course, we have here in UAE our lawyers who represent the chanel brands."

"We usually monitor the markets and we always send reports about any counterfeit cases to the main office in Paris, besides contacting the stores which are selling fake products and sending them warning letters. She, however, did not mention any such action having been taken in recent times.

The main dealer of Chanel in the UAE is the Chalhoub group.

But are these measures sufficient to tackle the problem? Is it enough to rely on the fact that customers of the famous brands know where to get them and that they do not get cheated?

The real issue here, many feel, is the role of an agent in protecting the brand he is marketing and in safeguarding the interest of the brand owner by spreading awareness about the existence of fakes and by keeping the local authorities informed about the violations.

Chalhoub and other major brand owners should increase awareness of this through advertisement campaigns. Mostly locals, Europeans, Americans, Australians and the Japanese buy these brands and are knowledgeable about them. UAE has so many other nationalities who also fall into the high income bracket. They too need to know that instead of buying 10 unbranded pieces, they can make do with two or three branded products, and live in style too, says a regular customer at one of the branded shops in Burjuman.

Lots of people from the sub-continent, and other Asians, who are not exposed to such brands, can be attracted to buy these brands through the awareness campaigns. There is a sizeable middle-class segment who can afford to buy brands.

Hermes, that has a strong backing in Japan, wasn't that famous in the UAE till a year or two ago. But, now, because of the successful advertisement campaigns, and better awareness thus created, it's popular among UAE women. The advertisement strategy paid off in this case.

Chalhoub and other major players who have some of the best brands with them, can look into such aspects, a UAE woman customer said.

According to Al Muroshedi, while the DED acts on complaints from agents, it has not received any such notification from the agents of Chanel and Louis Vuitton, some of the most popular brands subject to counterfeit, with regard to the existence of knock-offs in Dubai. He said the department receives 120 complaints a year from agents.

The manufacture and sale of counterfeit products, especially popular consumer goods and auto parts, are one of the emerging problems that Dubai faces. In recent times, the DED intensified it's anti-counterfeit drive, resulting in an increase in confiscation of fake goods entering Dubai ports, but the trans-shipment of counterfeits into the emirate continues and a lot of these items are available in major local markets.

Fakes in their hundreds are kept hidden in secret drawers inside shops.

According to Al Muroshedi, it is not just the well-known brands that are targeted by counterfeiters. The counterfeit trade covers a variety of products including electronics, auto spare parts, luxury goods, and even the global music industry. Describing the counterfeit trade as an internationally occurring phenomenon, he said that Dubai, as one of the biggest and very lucrative commercial centre, had begun to suffer from this phenomenon.

Spearheading the anti-counterfeit trade drive, the DED runs a programme to curb the menace of fake products in the local market and regularly analyses its plan for implementation and enforcement of measures for trade protection and control. In collaboration with authorities concerned, including Dubai Police, Dubai Municipality, Dubai Customs, and the companies, the DED continues with it's drive against the copycats. It conducts periodic inspections to reach the root of the counterfeit ring. Due to these inspection campaigns, most shops dealing in fakes have started hiding counterfeit goods in order to avoid detection and legal action.

Al Muroshedi said the department has managed to confiscate some goods from flats in different areas of the city and in shops, especially in Karama area.

He said the department conducts surprise checks, mostly directed at individuals or shops that have been blacklisted for dealing in fake products, and also responds to complaints, as many as 120 annually, from owners of trademarks or customers. He explained that the DED had doubled the fines against offences related to counterfeit trade, which range between Dh5,000 to 30,000, while some shops that were in violation of relevant regulations were given closure order for 14 days to one month.

According to Al Muroshedi, 95 per cent of the products in Dubai's markets are original because most of the international companies have opened regional offices in the emirate. He also attributed this large percentage of original goods in Dubai's market to the awareness among local traders, who, he said, know they have no right to import or sell any brand without the express written permission of the brand owner.

Despite this awareness, many traders seem interested in the lucrative counterfeit trade. Saeed, a shop owner, said : "We used to import these products from Korea, China and Thailand. We use to order the products by selecting them online (Internet) or catalogues and the company would send us the required goods. The products were delivered to us in Jebel Ali, but recently we started to import our products through Sharjah International Airport due to the strict measures implemented by the department (DED) during the last few months."

Saeed added:"The economic department has confiscated our products thrice, and that is why we keep the items in a secret place," he admitted. He, however, said that despite the fines imposed by the department, he will not discontinue selling fake products. "Most of our clients are women who prefer to purchase cheap products; and original products are very expensive, with some items costing as much as Dh6,000, and our female customers cannot afford these," he explained.

"We sell these products at a reasonable price to residents of Dubai, but the prices are doubled if the buyer is a tourist," he confessed.

Another shop owner said he started selling his products at cost price following strict measures implemented in the recent past.

Counterfeits cost brands $500 billion

THE counterfeit trade industry is a worldwide phenomenon costing brand owners millions in losses each year in addition to the loss of trust of their consumers.

The International Chamber of Commerce estimates that the counterfeit industry comprises five to seven per cent of global trade and is worth roughly $450 to $500 billion, whereas traders of fake goods make huge profits and justify their actions as a means to bring the products to the reach of millions of consumers rather than limiting the sales of the originals to selected clients who can afford them.

It goes without saying that internationally recognised brands are putting in lots of efforts and money in designing, producing and marketing their products only to find that their latest designs are duplicated and sold at very cheap prices.