Smoke and mirrors in the high world of fashion

For Ian Phau, Associate Professor at Curtin Business School, nothing is ever what it appears in the world of high fashion and luxury brands. From the streets of Hong Kong to the boutique outlets of Paris, high-end fashion brands and their equally high-end counterfeit doppelgängers are fast becoming one and the same. The only question is, does anyone still care about the difference?

Worldwide, the luxury brand industry is estimated to be worth a cool $US 80 billion. More than half of that total fi gure is paid in Asian countries, particularly emerging countries that possess an insatiable appetite for status symbols and luxury. The problem, as Phau explains, is what takes place in society when the gap between the desire for status brands and the reality of the bank balance is stretched to breaking point. Do people still care about the authenticity of the brand when they can't afford it? Is a Gucci knockoff worth as much social currency if it's essentially identical to the real product? Phau's research is pointing to the affirmative.

"I'm really into the psychology of counterfeiting," he says. "9 out of 10 people these days would have bought some form of counterfeit product, whether knowingly or unknowingly. Levis have found counterfeit products being sold in their own outlets, simply because of the huge amount of outsourcing and globalisation of delivery chains. It can be diffi cult to track authenticity with luxury brands, because the cost of the product is almost identical to a counterfeit on the production line." But if the manufacturing process and pressures of globalisation are creating an artifi cial supply of counterfeit products, what happens when consumers consciously seek out and purchase product they already know is counterfeit?

"There are some who convince themselves that it's okay to buy a fake. And I think there is more confusion in the market, whereby consumers don't really care anymore. They know about all the 'me too' products out there, and I feel that because of the globalised world, with all the technology that's cheaply available, there's no way you can say that there's a technical difference between the original and the counterfeit," he laughs. "Sometimes I can't even tell the difference, and occasionally I fi nd that some of the counterfeits are actually better quality than the original! It's quite shocking."

With all the technology that's cheaply available, there's no way you can say that there's a technical difference between the original and the counterfeit. 

Ultimately, Phau feels that there are now two very different markets for the big brand houses to contend with over the next few years. "On the one hand, there are the genuine products that will always be there. People who don't care about affordability and don't want to lose face will always buy the original. Then there's the counterfeit market, which I don't think you can defeat. The brand houses can compete using cheaper, subsidiary brands or morality campaigns, but I think there's a certain amount of brand equity that goes along with hundreds of consumers willing to wear a cheap counterfeit of your product, and to a degree I think the brand houses are going to have to accept that."