Dupes vs Counterfeit Products and the Impact on Luxury Brands

Croud Luxe Marketing Team

20th May 2024

~ 8 min read

What is a dupe, what is a counterfeit item and how are they impacting luxury?

How can luxury brands fight back against lookalikes and knockoffs? Nearly every consumer product and brand asks themselves this question at some point. 

Dupes and counterfeits are live issues affecting luxury brands, in particular heritage luxury brands. In this article, we cover:

  • What dupes and counterfeits are
  • How consumers view dupes and counterfeits
  • The effect dupes and counterfeits have on luxury brands
  • How luxury brands can respond to the dual threats

Understanding Dupes and Counterfeit Items

The differences between dupes and counterfeits lie in legality and the level of imitation. The standard definitions employed by luxury brands are:

Definition of a “dupe”

A ‘dupe’, short for ‘duplicate’, is a product that looks and operates very similar to another, often more expensive, item. Dupes are generally considered as dupes if they don’t explicitly copy distinctive logos, trademarks or patented designs from the original product. 

Dupes appeal to consumers who seek the aesthetic or functionality of a luxury product without the higher price tag. Dupes often take inspiration from popular designs, and while they aim to closely replicate the style and feel of the original product, they don’t claim to be the original. 

Definition of a “counterfeit” item

Counterfeit items, on the other hand, are illegal. They falsely claim to be something they’re not, mimicking original products using their brand logos and other trademarked elements. This is a conscious attempt to pass off their goods as the genuine article.

Whereas, for all their rights and wrongs, dupes don’t deceive consumers into believing that they are purchasing the real thing for a much lower price, counterfeit items do.

Counterfeit luxury goods are outright intellectual property theft. Many countries have laws to protect brands from such counterfeit operations but enforcement in many countries is not particularly thorough. Worse still, some countries’ laws essentially provide no IP protection at all. This adds to the significant challenges brands face when asserting property rights overseas.

How do consumers view dupes and counterfeits?

Now, let’s look at the other side of the coin. How do dupes and counterfeits affect consumer behaviours and perceptions?

Why consumers choose dupes or counterfeits

The primary and overarching reason consumers purchase dupes or counterfeit items is price. Luxury goods often cost way more than what regular consumers can afford. Dupes and counterfeits therefore offer a more financially manageable way to achieve a desired look within available budgetary constraints.

Accessibility is another reason. Wannabe luxury consumers may not have ready access to the luxury brands they want. In developing areas of the world with growing middle classes, brands may not be available in their countries. This partly explains the popularity of online platforms selling dupes or counterfeits that can reach these consumers more effectively. The same argument can be made on the growing numbers of consumers using the luxury resale market.

The contradictory perceptions of dupes and counterfeits

Perceptions vary from consumer to consumer. In the eyes of some consumers, dupes and counterfeits erode the value of genuine luxury brands because, although not authentic, the sense of exclusivity and status associated with that product diminishes. What is the point of buying a genuine product when others are going around with a lookalike product and only those with a fine eye for detail can tell the difference?

Alternatively, some consumers may actually value the brand more if they see counterfeit versions. We cover flattery later in this article. When a consumer sees that a company has invested the time and effort to create, manufacture and distribute a lookalike of a luxury product, it may be a signal to them that the original must be an exceptional product worthy of imitation.

In summary, consumer perceptions on dupes and counterfeits on luxury brands is a complex area.

What effect do dupes and counterfeits have on the luxury market?

Luxury products are ‘luxury’ for many reasons, not least the value of the brand creating that product, the product’s exclusivity and the high-quality craftsmanship required for its production. The rise of dupes and counterfeits does pose a significant financial and positional challenge for luxury brands.

How dupes impact luxury brands

Dupes, while not illegal, may have a corrosive effect on the value of the products they imitate. This is especially true in the age of social media, where dupe sellers benefit from widespread visibility and easy purchase options. Consumers may look at a luxury and a dupe, notice the difference in price and question whether the value intrinsic in an original is really that much higher than a dupe.

The truth is actually probably more nuanced. In a 2016 academic paper entitled “You Look Marvelous: The World of Flattery in Marketing”, the authors (Wang, Sagara and Kahle) argued that imitation is a form of flattery. When used strategically, this flattery can become a powerful tool for luxury brands to positively influence consumer behaviour and associations. The academics highlight how clever imitation by mass brands can stoke demand for the original luxury version by reinforcing its aspirational qualities.

Lululemon handled the issues of dupes particularly deftly. They took an unconventional approach when faced with a flood of dupes for their popular Align leggings on TikTok. Rather than fight the dupes, Lululemon embraced them by holding a “dupe swap” event. Customers were invited to try on real Align leggings and compare them to their dupes. The aim of the campaign was to highlight the superiority of Lululemon’s product. It worked as many swapped their inferior dupes for free.

Lululemon turned the threat of dupes to their advantage. By giving customers a tangible experience of the difference in quality, the added value became apparent thus reinforcing their position as the original and superior leggings brand. The campaign went viral on TikTok, attracting new customers and emphasising Lululemon’s exclusivity in a positive way.

The consequences of counterfeit items on luxury sales

Counterfeit items pose a more direct and severe reputational and financial threat to luxury brands. The sale of a counterfeit over a genuine item represents revenue lost to the luxury brand. The quality of counterfeit items often falls short of the genuine article. Consumers who mistake them for the real thing may consequently view the brand as subpar.

It’s very hard to quantify the impact of counterfeits on luxury brands but there are infrequent surveys into it like Ghost Data’s 2019 investigation on Instagram.

The study revealed the most counterfeited brands were Gucci, Louis Vuitton, and Chanel – over 50% of fakes identified. This suggests counterfeiters target historic luxury brands where prestige drives popularity and revenue potential.

The study revealed that China was the top origin country for counterfeit goods being sold on Instagram with a 43% market share. Russia accounted for 30% of accounts followed by Indonesia at 13%. The location of these counterfeit vendors is evidence of Instagram’s global reach and the extreme difficulty brands have in exerting control over the spread of counterfeits worldwide.

Ghost Data found that over 15% of luxury brand content was related to counterfeit goods. This places genuine brands at risk of potential consumer blowback through no fault of their own if a consumer purchases a poor-quality fake that they believe to be genuine.

How luxury brands can respond strategically to the issue

Lululemon’s response showed that, for luxury brands, the best approach to preserve brand reputation, protect revenue and maintain the perception of quality among target audiences is to address the issue directly.

Battling dupes

With dupes, if the dupe is not so egregious that it strays into the territory of a counterfeit, luxury brands will win by focusing on their unique qualities, like superior materials, craftsmanship, service and heritage. Dupe manufacturers can not hope to replicate luxury brands in these areas.

Customer education is also important. Show customers why your products and services are so valuable compared to dupes. Highlight the long-term benefits of buying the genuine article, advantages like durability, quality, visual appeal, after-sale services and even potential resale value.

Countermeasures against counterfeits

The legal route is a popular if frustrating route to take. Luxury brands like Gucci are increasingly launching legal action against counterfeiters selling fake goods online. 

Previously, brands often sued the platforms like Amazon or Facebook for not doing enough to stop counterfeit sales. Now, brands are directly going after the counterfeit sellers themselves in lawsuits. 

Sometimes, they team up. For example, Gucci and Facebook jointly sued an alleged counterfeiter using Facebook and Instagram to sell fake Gucci products. Despite Facebook taking down over 100 of the defendant’s accounts, new ones kept popping up. 

Joint lawsuits between brands and platforms represent a shift in legal strategy to target sophisticated counterfeiters more directly. Luxury brands have long felt that online platforms need to be more proactive in anti-counterfeiting efforts instead of just relying on takedown notices and the platforms seem to have taken some heed.

Another approach is advanced anti-counterfeit technology like holographic tags, QR codes or even blockchain technology to authenticate products. These could be particularly valuable because consumers with the correct tools on their mobile phone could use apps to help them spot fake items in retail situations.

The future of luxury in the face of dupes and counterfeits

As luxury brands consider how to address the challenges posed by dupes and counterfeits, what might the future hold?

An ongoing technological arms race is likely, similar to cybersecurity. Dupe and counterfeit production will become more advanced, as will anti-counterfeiting measures. To stay ahead, luxury brands will need to invest in technological superiority while still preserving the unique experiences that attract their audience.

ESG also offers an opportunity as consumers stay conscious of ethical considerations and environmental impacts. Luxury brands can distinguish themselves by emphasising their commitment to sustainable and fair practices. Dupes and counterfeit manufacturers often do not have the budget or inclination to invest in such programs given luxury brands a head start. 

On the issue of the consumer, it will be interesting to see how their behaviour changes, particularly the younger generations. They are known currently for their value-driven purchases. But as they become richer and more secure, they might reward themselves by investing in genuine luxury goods instead of settling for dupes and counterfeits which they may be doing now.

Working with Croud Luxe

The future of luxury in the face of dupes and counterfeits is complex. However, we’re certain that the enduring appeal of luxury means that the market will remain resilient and profitable.

For over 10 years, we’ve been telling brand stories, demonstrating the appeal of their brands, products, services and experiences. We’d appreciate the opportunity to find out about your brand, find your target audience and communicate your uniqueness to them. Please get in touch – we look forward to working with you.

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