Is Counterfeiting Actually Good for Fashion?
The battle against counterfeiting is an un-winnable war that’s further perpetuated by participating in it. Indeed, it is the fashion industry itself, with its manufacturing of desire and prestige, that creates a market for knock-offs. Until the very basis of the industry model changes, counterfeiting will endure.
This is a touchy subject within both the clothing business and the wider fashion community. The general consensus among brands and consumers alike is that counterfeiting is at best immoral and at worst downright evil. If you try to argue otherwise, like I did a couple of months ago, you risk being accused of being an “eighth grade Marxist” by a disgruntled commenter.
But just because the consensus leans towards condemnation, that doesn’t make it universal. When Highsnobiety went to check out OFF-WHITE’s new Hong Kong store, Virgil Abloh professed that “you can’t counterfeit something that’s not wanted, that’s the highest achievement that you can get: to make an idea and then someone want to make a copy of it.” I’ve already presented my own argument, and there’s actually substantial evidence that counterfeiting can actually be good for brands, some of which is outlined in The Knockoff Economy: How Imitation Sparks Innovation.
What legitimate manufacturers often refuse to acknowledge is that counterfeiting actually provides them with free advertising. The quality of snide goods has become so high that fakes are often indistinguishable from their legit counterparts. Sure, the right pair of hawkish eyes can inspect things like stitching to determine the legitimacy of a pair of sneakers, but if you spot someone on the street in some convincing knockoffs, your brain is going to respond to them in the same way that you would to real ones.
Essentially, this counts as free advertising. Not only that, but it’s free advertising via peer endorsement, which is far more effective than a piece of advertorial or a pop-up ad because it slips by our resistance to marketing. The desirability of a brand has little to do with its products, and more to do with the fact that other people want them.
While exclusivity is undeniably a major source of brand prestige, desirability is arguably more important. We’d all like to think that we’re terribly original, independently-minded tastemakers who are unswayed by peer pressure, but the fact is that we overwhelmingly pick things up by imitation.
This is why brands seed products out to influencers: because we crave the validation of other people. So when we spot someone wearing knockoffs on the street, that actually inflates the brand’s prestige because it signals to us that we’re not the only one lusting after a certain label or product, which makes it all the more appealing. There’s a tipping point, of course, but it's unclear where that is: after all, Louis Vuitton, Gucci and the like aren’t doing half bad, despite the abundance of cheap imitations out there.
Free advertising aside, knockoff goods can also serve as a gateway purchase. Renee Richardson Gosline, a researcher at the Massachusetts Institute of Technology, conducted a two-and-a-half year long study that focused on 112 women who attended “purse parties” where they would buy counterfeit handbags. Gosline found that snides served as an introduction to branded goods which, rather than satiating their desire, actually caused it to grow. She explains this in greater detail in Forbes:
“Much to my surprise, and perhaps theirs, these consumers experienced increased attachment to the real brands. The fake products were a gateway. As my subjects’ knowledge of the luxury-handbag brands increased, they began to go into stores to check out the real thing–something they had never done prior... The fakes hadn’t turned potential Gucci customers away from the brand. The opposite was true. There were various reasons why. Women who’d bought bags at a purse party began to notice the inferior quality of the fakes–and envy the real thing.”
She also notes that “nearly half” of the women documented in the study would go on to fork out for a legit designer label purse.
The moral argument against counterfeiting lies in the assumption that knockoffs cannibalize a brand’s potential profits. That aforementioned commenter who accused me of being an adolescent commie summarized the reasoning behind intellectual property law fairly succinctly:
“Yeah [top brands] make a lot of money, because they make great products that people want. They then pay that money to their top of the line designers to come up with the next big ideas, to their shareholders that help the brand grow, all the way down to the people working in the factories. If everyone buys counterfeits then this process stops.”
Unfortunately for “Joe” and the 22 people who upvoted his comment, this is a simplistic reading of real-world economics.
For the “process” to “stop,” as he put it, a significant majority of a brand’s consumer base would have to cease buying legitimate goods for a sufficiently prolonged period of time to render a brand completely unprofitable. While this could happen in theory, the chances of it occurring in reality are slim to non-existent.
Think about it: how many people do you know that only buy knock offs? Not many, I would imagine. Fakes are primarily purchased by people who either can’t afford the real thing or don’t want it badly enough to pay the grossly inflated markups that come attached to designer labels. I might own a pair of snide Celine sunglasses but the rest of my wardrobe is legit. This can’t be counted as a loss for the brand because I would never consider paying for an original pair anyway.
The fact of the matter is that counterfeits exist in their own independent market, and it only partially overlaps with the legitimate economy. That’s not to say that counterfeits don’t infringe on a brand’s profits at all – of course they do – but it’s difficult to accurately determine how much damage is actually done because not every dollar spent on a knockoff is a dollar that was destined to be spent on the real thing. And when you take into account the free advertising and gateway effect enabled by snides, there’s a possibility that the black market actually boosts designer labels’ profit margins.
While this is difficult to prove, there should be little doubt that counterfeiting is a valid measure of success: if a brand is so appealing that it inspires copycats, then it must be doing remarkably well. Call me a contrarian, but if I were a brand I’d be far more concerned if no one was trying to counterfeit my wares because that would indicate that I have a desirability problem.
As Oscar Wilde so famously said, imitation really is the sincerest form of flattery.
For a deeper dive into counterfeiting in fashion, watch our documentary below.
