COUNTERFEIT GOODS

Perceptions of income inequality drive people to buy counterfeit goods

By our African Marketing Confederation News Team | 2024

Fake goods are not always cheap status symbols. Rather, they are a means of rejecting the exclusive markets and companies that service them.

A study led by the City University of London has found that perceptions of income inequality drive consumers’ interests in counterfeit luxury goods.

 

The researchers found that, as perceptions of income inequality increased, consumers value counterfeit luxury products for their ‘egalitarian value’ – a worth associated with the fake goods’ perceived ability to restore equality in society.

 

Researchers conducted five studies involving more than 2,000 participants. These examined participants’ views on counterfeit luxury goods, using samples ranging from designer Rolex wristwatches and Gucci handbags to Burberry and Louis Vuitton scarves.

 

The results showed that perceived income inequality does increase consumers’ interests in buying counterfeit goods through the egalitarian value of counterfeits. But it is not the only reason behind buying the items.

Photo: Quang Viet Nguyen from Pexels

Dr Joyce Liu, Lecturer and Assistant Professor in Marketing at the university’s Bayes Business School (formerly Cass), explains: “Previous research tells us that beliefs about how economic resources are allocated can affect people’s behaviours, especially when it comes to luxury consumption. We wanted to know how these beliefs may be linked to why people buy counterfeit luxury items.”

 

A means of rejecting the exclusive markets and companies

 

She adds: “Rather than serving as a cheap status symbol for those who are unable to afford the full price luxury item, we argue that counterfeit luxury goods may be used by consumers as a means of rejecting the exclusive markets and companies.

 

“Purchasing a fake Gucci handbag or Burberry scarf may help consumers feel like they’re levelling the playing field of the luxury goods market by breaking down market restrictions created by these overly exclusive luxury companies.

 

“This is not to say that buying counterfeit products actually restores market equality, but it might be the way that consumers feel and how they cope with inequality.”

 

Says Dr Wiley Wakeman, an Assistant Professor in the Department of Management and Organization at the Stockholm School of Economics: “We think this research is particularly interesting as it links growing inequality to ‘deviant’ forms of consumption – such as buying counterfeit luxury goods, suggesting that buying counterfeits is not driven by economic reasons per se, but to achieve a sense of social equality.”

 

Wakeman continues: “It also begs the downstream question as to whether mechanisms that increase brand exclusivity, such as maintaining [waiting] lists for luxury watches or handbags, may counter-intuitively manifest the egalitarian value in, and the consumption of, counterfeits – explaining why consumers might buy these goods.”

 

The paper, titled ‘The egalitarian value of counterfeit goods: Purchasing counterfeit luxury goods to address income inequality’, is published in the peer-reviewed Journal of Consumer Psychology.

 

You can find out more about the study here.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.