Lured by Fake Luxury Goods

Fake luxury goods have found their way online and you need to be wary of them.

The past few years have witnessed many changes in the Indian markets that have altered the dynamics of business in the country. Of these, the overarching one has been the arrival of a new breed of young buyers who don’t just have a penchant for quality but also like flaunting their priced possessions. A major indicator of the purchasing prowess of this group is the surge seen in the Indian luxury goods market. The value of the Indian luxury market is expected to go up to $7 billion by 2017 from a figure of $2.18 billion in 2011.

What this has also brought about is also a certain haziness in the definition of luxury. With more and more people wanting to claim possession to luxury, the original idea of it, the one that equated to craftsmanship, heritage and exclusivity is being challenged. The rich are constantly on a look out for their next prized possession, and to cater to them, products and stores that ‘pose’ as luxury has mushroomed. But the biggest challenge to the sanctity of luxury goods has come in the form of the internet, the so-called eCommerce space.

Though the emergence of an online space for luxury goods has taken its time, the veracity of such a space is still under scrutiny. Internationally, there are a few websites like net-a-porter that have been selling premium luxury brands including Western labels such as LVMH, Dior, Gucci, Emporio Armani, Hermès, Chanel, Salvatore Ferragamo, Bulgari and the like. And now we have websites in India like Luxepolis.com and Darveys.com that work on different models trying to do the same.

The figures online are mind boggling. Recent data claims that Indians are expected to spend $84 billion (around Rs.55,860 crore) on online stores in 2016. Well, let us face it. That is some serious
money and has invited the obvious entry of fraudsters who aim to make a killing selling fake goods online. And out of the all the segments, luxury is their best bet, for its low volume, high-intensity sales that can fetch a sizeable amount in a single swoop.

Which are these websites?

These websites constantly transform and re-invent themselves taking a different name every time. They could call themselves as abc.com in their first avatar , xyz.com in the second and qsw. com in the third. But what remains the same is the claim of exorbitant discounts. For instance one of these websitesclaims to sell the Rolex GMT Master II whose original price is Rs. 5,31,300 at Rs. 1,35,000, a discount of almost 60% which they claim to surplus goods. Well, 60% is discount enough to propel sales and what’s more, they trade in most products from Rolex watches to Hermes scarves, and yes, the delivery is prompt too.

So what is wrong?

The basic premise that luxury brands like Hermes, Rolex or LVMH manufacture a surplus of products is flawed. Luxury is built on the concept of exclusivity, which means a brand only produces a limited number of units of a given model. Production of surplus goods and then selling them off at discounted rates squarely destroys this concept of exclusivity. The truth is most of these brands
hold on to the idea of exclusivity so hard that they don’t even offer employee discounts. Quite obviously then, the products that are sold are cheap counterfeits not even worth one tenth of the
discounted price. And like many have discovered, the tall claims made about service lasts only till the transaction is completed and you are left to fend for yourself once the product is delivered.

Modus Operandi

These websites use browsing data to target probable customers (victims) from their patterns of online activity. That is, if you are somebody who likes looking at the latest offerings from luxury

brands online, you are sure to find these websites among the recommended sites for you. These websites are audacious in their moves, even encouraging personal communication through phone calls and through whatsapp messages with their executives to build trust. They are reassuring and supportive till they receive the payment for the purchase. Once the payment is made they do the disappearing act and promptly disappear into the unknown.

The law of Demand

The fact remains that there are seekers for these goods who are willing to buy these products for various reasons. As brands increasingly become vehicles of personal prestige, the need to flaunt such brands become necessary. So there are many who willingly resort to these sub- standard products knowingly, just to impress their peers. It is probably this demand that has spurred the growth of fake luxury markets online. However, many innocent buyers fall prey to these websites, trusting the genuineness of these products. “We have customers who come to us with these products, absolutely unaware that they are fake. Sometimes they have themself fallen prey to it, sometimes these have been gifted tothem. It is a very awkward position to be in.” says Hafiz Salahudin, Director of Swiss Watch Boutique at Lulu Mall.

So is everything available at a discount online fake then?

Not really but there is still a catch. There are websites that have devised models that allow them to deliver genuine products, both new and used. Though the authenticity of these products here is ensured by the websites, legal implications resulting from their model of business are questioned. Last October, Burberry India filed a case in the Delhi High Court seeking compensation from and restraining Darveys, an online luxury store from marketing, advertising and selling its products at discounted prices on its site as it would cause “’huge irreparable and unquantifiable loss” to business. In a statement, it said: “Such acts not only amount to misrepresentation but also to cheating and fraud apart from infringement of the trademark.”

The way out

Luxury goods which are built on the principle of exclusivity may not be interested in the democratisation of their products, so if there will ever be a legally supported online market is a tough question. Deeming the propriety of models of these new age online stores like Darveys who lay claim to authenticity can itself take a while. So it is in the interest of the buyer to exercise caution while making a purchase. The worth of luxury comes from the painstaking effort that is put into its manufacturing. So it is only appropriate that they are dealt with the respect that they call for.