Research and analysis

IPO counterfeit goods research (Wave 2): Executive summary

Published 22 December 2021

Background

While considerable evidence exists on the topic, to enable the Intellectual Property Office (IPO) to effectively achieve its aims, the organisation identified a need for more consistent research on consumers in relation to the purchasing of counterfeit physical goods.

Given the success of the IPO’s Online Copyright Infringement tracker (OCI), there is a desire to establish a similar evidence base to inform decision-making around physical counterfeits.

In 2019 a benchmark study was established, with this second wave now allowing us to track and monitor trends over time. The IPO is also keen to gather evidence that will help to facilitate behaviour change in consumers, based on their specific needs. For example, through creating awareness of counterfeits among those who are currently being deceived and fostering greater respect for IP among those who are more actively seeking-out such goods.

Methodology

The following section outlines the methodology of the 2nd wave of the Physical Goods Tracker, which took place in 2021. The research comprises of a 3 stage, mixed methods design.

Stage 1: Online Survey

• online data collection, with fieldwork taking place between 15/03/21 and 18/04/21
• 15-minute survey
• N=5,000
• Nat Rep of UK 18+ population

Stage 2: Ongoing Qualitative Engagement

• online Community, with fieldwork taking place between 26/04/21 and 02/05/21
• mixture of research tasks, experimental conditions and discussion topics
• 5 days
• N=64
• infringers

Stage 3: Message testing

• online data collection, with fieldwork taking place between 07/06/2021 and 07/07/21
• tested 13 pieces of behaviour change messaging across 4 surveys
• N=1,000
• Nat Rep of UK 18+ population

Executive summary

This wave of the research was asking about a period when much of the UK was in a state of lockdown owing to the Covid-19 pandemic. Comparisons to the first wave, which took place in 2019, would appear to point to shifts in behaviour which could potentially have been precipitated by Covid-19.

Overall summary

• the overall levels of consumption of counterfeits were similar compared to the previous wave in 2019. Most respondents (73%) continued to indicate that they had never purchased counterfeit goods. There were a multitude of reasons as to why they had not done so with the top ones relating to the perceived low quality of the products as well as moral considerations (e.g. worrying about supporting criminal activities, use of low-cost labour/poor working conditions)
• over a quarter (27%) indicated that they had ever knowingly bought counterfeit goods, with 15% saying they currently do so on an often, sometimes, or occasional basis (2% lower than in the previous wave). Cost continued to be key in why people purchased counterfeits with the cheaper price and wanting to spend less money the top two reasons
• younger respondents continued to be those most likely to knowingly make counterfeit purchases and therefore was highest among those aged 18-24 (30%) and 25-34 (26%). It fell to 18% for those aged 35-44 and was between 7-12% for all older age groups
• consumers in the Clothing, footwear and accessories and Sports categories remained those most likely to have made counterfeit purchases, with 14% and 12% having done so respectively. There were some specific shifts compared to last year in terms of the categories that were purchased. 9% of Toy consumers indicated they had made a counterfeit purchase this year (an increase of 4% compared to 2019) while for Sports there was a 3% increase
• there are some indications that, since the previous wave, there were shifts in terms of where respondents are purchasing their counterfeit goods. This could potentially be linked to changes in shopping behaviour due to Covid-19. While in most categories in the previous wave respondents indicated that they were more likely to use physical sources, this has now switched to online sources being more prevalent. Sports footwear, for example, had a 25% decrease in those making purchases in person and an 18% increase in those making them online

Infringement levels

Beauty and Hygiene

• 97% of the total sample had purchased a beauty and hygiene product in the last year
• 7% of those who purchased a beauty and hygiene product in the last year purchased at least one counterfeit product in that category
• the most prevalent source of purchase for counterfeit beauty and hygiene products was Online e-commerce sites with 41% of the overall purchases of counterfeit cosmetic and toiletry products and 40% of the hygiene products. In the qualitative Online Community Facebook Marketplace, Vinted.com and Wish.com were all mentioned as sources that were frequently used
• the cheaper price was the main reason for purchasing counterfeit products, with 48% of participants stating this as a main factor
• within the sample of the Online Community:
  
• the most common counterfeit purchases were perfumes, as these were seen as the safest products in comparison to make up or hair care
  - whilst some did occasionally try out counterfeit make up or hair products, many were worried about the potential risk of putting these directly on their skin and therefore avoided them
  - many participants said that the pandemic had had little impact on their purchasing of counterfeit products in this category
  - reviews played an important part in online purchases of counterfeit cosmetic, toiletry and hygiene products and many had trusted sites/contacts from which they bought online. Some participants mentioned watching YouTube reviews of counterfeit products prior to purchasing

Clothing, footwear and accessories

• 88% of the total sample had purchased a clothing, footwear, or accessory product in the last year
• 14% of those who purchased a clothing, footwear, or accessory product in the last year purchased at least one counterfeit product in that category
• the most prevalent source of purchase for counterfeit beauty and hygiene products was Online e-commerce sites with 31% of counterfeit clothing purchases, 31% of counterfeit footwear/shoes purchases, 34% of counterfeit accessories (excluding watches) purchases and 39% of counterfeit watch (excluding smart watch) purchases
• the cheaper price was the main reason for purchasing counterfeit products in this category, with 58% of participants who purchased a counterfeit watch stating this as the main factor
• within the sample of the Online Community:
  - most participants spoke about buying one of three main types of article: designer tops and hoodies; designer handbags; and designer sun
  - purchasing in this category had decreased for many because without being out and about amongst others, they felt less impetus to be seen in particular brands. glasses
  - some felt that the pandemic had changed their perception of clothing and that having bought less over lockdown, they would try to maintain a habit of buying less clothing in general, whether authentic or counterfeit

Sports

• 58% of the total sample had purchased a sports product in the last year
• 12% of those who had purchased a sports product in the last year purchased at least one counterfeit product in that category
• the most prevalent source of purchase for counterfeit beauty and hygiene products was Online e-commerce sites with 38% of counterfeit regular sportswear purchases, 35% of counterfeit sportswear from clubs/franchises and 33% of counterfeit sports footwear purchases
• the cheaper price, and wanting to spend less money, were the main to factors that influenced the purchasing of counterfeit products in this category
• within the sample of the Online Community:
  - some of the most common purchases made by participants were counterfeit football shirts and trainers which were often used primarily for fashion rather than sport. Some also bought counterfeit items for exercising such as leggings, shorts and t-shirts from well-known sports brands
  - participants noted that since the beginning of the pandemic, their purchasing of sportswear had remained relatively consistent. Some said their consumption had increased slightly due to staying inside more and using sportswear such as leggings, tracksuits and sports tops as loungewear

Toys

• 41% of the total sample had purchases a toy product in the last year
• 9% of those who purchased a toy product in the last year purchases counterfeit products in that category
• the most prevalent source of purchase of counterfeit toys was Online e-commerce sites with 46% of the counterfeit toy purchases

Electricals

• 76% of the total sample had purchased an electrical product in the last year
• 8% of those who purchased an electrical product in the last year purchased counterfeit products in that category
• the most prevalent source of purchase of counterfeit electrical accessories was Online e-commerce sites, with 57% of counterfeit electrical accessory purchases
• within the sample of the Online Community:
  - the most common types of electrical products that participants bought counterfeits of were often accessories; chargers for devices such as phones or laptops and headphones
  - the reasons for purchasing counterfeits of electrical goods revolved around price and the fact that electrical goods and accessories tended to need replacing regularly
  - the use of counterfeit electricals had remained consistent to previous years, whilst for some there was an increase. For those who saw an increase, the pandemic had meant that more people in their household were constantly indoors and on devices, creating a greater need for things such as chargers and headphones

Alcohol

• 82% of the total sample had purchased an alcohol product in the last year
• 4% of those who purchases an alcohol product in the last year purchased counterfeit products in that category
• the most prevalent source of purchase of counterfeit alcohol products was In-store not from the brand - via a smaller retailer, with 41% of counterfeit alcohol purchases

Communications testing

• messages fell broadly into three categories, all relating to the impact of the counterfeit trade: the impact on the environment; the social and economic impact on people around the world; and lastly, the potentially harmful impact on consumers through toxic or dangerous ingredients
• the top three ranked pieces of messaging in terms of persuading people not to buy counterfeit products in the future all related to societal and economic impact. The most effective piece of messaging was selected by around four in ten (39%) and related to counterfeit goods being produced in sweatshops with bad working conditions and low pay

Consumer segments

Three segments were identified which exhibited differences in terms of their purchasing behaviours and demographics:

• light counterfeit purchasers: The most infrequent purchasers of counterfeit goods. They are older and are slightly more likely to be female. They are not as interested in trends around new products and are less likely to make counterfeit purchases across multiple product categories. Their motivation is to spend less money, and usually buy fake products as an impulse
  
  6% of the total sample fall into this category
• moderate counterfeit purchasers: They purchase counterfeit goods more frequently than the first segment. They are also more likely to be female but have a more mixed profile in terms of age. They have a spread of motivations as to why they purchase fake products, but their attitudes show that they are more likely to thoroughly research their purchases
  
  4% of the total sample fall into this category
• heavy counterfeit purchasers: The most likely to be frequent purchasers of counterfeit goods. They are the youngest segment and skew male. They claim to be at the forefront of trends around new products and buy counterfeit goods across a range of categories. Attitudinally, they have the least regard for their purchases being harmful
  
  4% of the total sample fall into this category