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Global Problem of Counterfeiting

Fake brands remain stable. Up to 40% of garments sold in most Russian stores make counterfeit products with the price three times higher than those in European countries. Those data are based on the fashion retail market survey carried out by the Analysis Agency “Infoline”, says Ivan Fedyakov, Head of the Company.

“It is brand products that are analyzed as they are more frequently represented by the lines of Italian brands. In fact, according to the statistics, the percentage of consumer goods imported to Russia is extremely low and fails to correspond to the actual market volume. Since the imports prevail on the market, we assume those products to be imported through other channels including inflow of counterfeits from Asian countries,” explains Mr. Fedyakov.

Dmitry Yanin, CEO at the International Confederation of Consumer Societies, thinks the situation with counterfeit products is gradually improving.

“The main problem of the Russian garment market is in the absence of legal retail trade that could meet consumer needs. The state authorities have long turn a blind eye to the criminal markets of Cherkizovo and Luzhniki, thus, facilitating counterfeit distribution. Now markets are being closed making 40–50% as compared to 70% for the past years. And this rate has a decreasing tendency,” considers Mr. Yanin.

According to Anna Lebsak-Klemens, CEO at Fashion Consulting Group, there are the same volumes of counterfeit products in Western countries.  

“The problem of counterfeit products especially in the fashion industry with the high value of brand acquires global scales. Recently, luxury brands Hermès and Burbery have won $100 million in two landmark counterfeit cases from the Chinese retailers and Internet-stores. That is why this issue is burning not only for Russia. The revenues are mostly based on the higher price for brand-name products, so the essence of counterfeiting is about reducing those revenues from brand owners,” says Anna Lebsak-Klemens.

For the next two years, experts predict business struggle between international retailers and local vendors. Formerly, leading manufacturers were interested in million cities, but today brand owners are concentrating their attention on the cities with population from 100,000.


Direct speech
Dmitry Medvedev:
Black and grey import markets must be liquidated from the arena
What is the difference between counterfeit and falsified products?
On a conservative estimate, turnover of counterfeit products within Russia exceeds 100 billion roubles per year.
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