EY product piracy 2022 | EY

  • Purchases of counterfeit branded goods through online auctions have more than doubled since 2015
  • More than a third of Germans have already bought a fake – the health risks are acceptable
  • Two out of three customers buy fakes abroad
  • Overall, men are more likely to buy imitations than women

Counterfeit products are in high season, especially during the holiday season: Product piracy is a problem for the state and the economy worth billions – and often also a health risk for buyers of mostly inferior products. Especially when the copies are not recognizable as such. More than one in three consumers in Germany (38 percent) have already bought counterfeit jewelry, clothing or technology, and almost half of them knew they were buying fakes.

Men are much more likely to buy counterfeit products: 44 percent say they have bought a copy at least once, compared to just 32 percent for women. The motivation for buying fakes: First of all, the lowest price. 72 percent cited this as a reason for the purchase—a slight decrease compared to 2015, when it was 84 percent. Easy access to counterfeits, on the other hand, has grown as a factor: Just over one in four reported it (27 percent), nearly double the number seven years ago (13 percent).

These are the results of EY’s current Product Piracy study. 1,004 adult consumers in Germany were interviewed for the representative survey.

“The supposedly low price customers pay for counterfeits is costly to others: the companies, some of which have built their brands and reputations over decades. Employees who work day in and day out to improve existing products or develop new ones. In addition to the commitment and energy of each individual, this also costs money. Billions are lost every year by companies and their employees through counterfeit products,” says Michael Renz, Head of Consumer Goods and Retail at EY Germany and author of the study.

Counterfeit buyers know they are doing damage to the intellectual owner of the original – and they still shop outside the box. Respondents see the consequences of buying counterfeits, particularly in terms of sales (68 percent), brand image (54 percent) and jobs (51 percent). And: More than a third (39 percent) see product piracy as a major problem for the German economy – along with respondents who rate the risk as moderate, that’s almost nine out of ten study participants (86 percent).

“Of course, the money that companies lose through product piracy is missing from being able to secure Germany as a business location in the future. Ultimately, lower corporate sales mean lower tax revenue – which also has consequences for citizens,” says Alexander Meinrad, Senior Manager Forensic & Integrity Services at EY and co-author of the study.

More and more fakes are being bought online

The market for fake watches, jerseys and headphones is particularly growing online: 28 percent said they had already ordered fake branded products online. In the last seven years, the knock-off market has more than doubled here.

Meinrad: “The counterfeit market has grown steadily in recent years, especially online. With just a few clicks, all kinds of plagiarism can be ordered from anywhere in the world. It is very important that businesses act as soon as they become aware of a store or website selling copies of their merchandise. And as soon as possible. Observing the market, collecting evidence, informing the authorities – this is essential for companies to take action against product piracy.”

The companies are supported by German customs, among other things: they remove counterfeits ordered on the Internet from circulation. This happened 25,000 times in the past year: in 2021, according to the official annual customs balance, border guards seized counterfeit goods worth 315 million euros. But it’s not just the customer-bought plagiarism that’s gone. In addition, the manufacturers of the original product may also assert compensation claims against the purchaser.

“Many customers still think that buying counterfeit products is a minor offense – but that is not the case at all. Anyone caught will face serious consequences. Not just through customs,” says Renz.

Two-thirds of counterfeits are bought abroad

For the most part, however, imitations are still bought directly abroad: 68 percent of respondents said so. Almost one in two people (47 percent) hit a “flying dealer” or a market. There are also penalties here: for all goods purchased by travelers on vacation, the total value limit for flights or boat trips is 430 euros per person. For travel by car and train it is 300 euros. From the value of 700 euros, German customs, which assess the value of the goods, take import tax – and even collect any counterfeits.

The health risk should also not be underestimated: burning batteries, poorly processed and untested technology, cheap substitutes for imitation jewelry or aggressive chemicals in clothes – all this can injure buyers of fakes or make them sick. Respondents are aware that more than four out of five study participants cite health risks (84 percent) as the biggest risk when buying counterfeits. However, many consumers accept the risk with approval.

“Of course, this is also related to the fact that almost all Germans currently have less money in their wallets and inflation is running from one peak to another. In the future, consumers will think twice or thrice about which products they can really afford. At the same time, however, attention should not wander to illegal alternatives that cause financial damage and also pose a risk to one’s health,” says Renz.

You can order the product piracy study here for free.

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