Research and analysis

IPO counterfeit goods research (Wave 3) - Part 1 - Methodology

Published 3 February 2023

Section 1: Executive summary

The overall levels of consumption of physical counterfeit goods remained consistent with the previous waves. As with previous waves, most respondents (71% in Wave 3) indicated that they had never (knowingly) purchased counterfeit goods. Despite some slight fluctuations between the waves, the top three reasons for not purchasing counterfeits remained, in no particular order, not liking the quality of counterfeit products, worrying about supporting criminal activity, and the use of low-cost labour/poor working conditions.

29% of the sample indicated that they had knowingly made a counterfeit purchase while 18% currently did so on an often, sometimes, or occasional basis (2% lower than in the previous wave). A further 10% had never made a counterfeit purchase but expressed that they would consider doing so in the future.

As with previous waves, there was a strong correlation between age and counterfeit purchasing, with young respondents more likely to purchase counterfeits. 31% of those aged 18-24 and 34% of those aged 25-34 currently purchased counterfeits, compared to 24% of 35-44-year-olds, 12% of 45–55-year-olds and just 8% of those aged 55 and above. Across all age groups 9-13% of respondents indicated that they used to purchase counterfeits but no longer do.

Wave 3 of the Physical Goods Tracker saw a noticeable increase in the proportion of Toy consumers who purchased counterfeit goods (at 14%, +5% from Wave 2). Toys, along with the Sports (15%) and Clothing, footwear and accessories (14%) categories, had the highest proportion of counterfeit purchasers.

The sources of counterfeit purchases remained relatively steady in Wave 3. Regular sportswear saw a noticeable increase in online purchasing (+13%) and the in-person purchasing of electrical accessories decreased by 11%. All other categories remained relatively in-line with Wave 2. This comes after a widespread increase in online purchasing and decrease in in-person purchasing of counterfeits in Wave 2, suggesting that the shift towards online counterfeit purchasing has become standard. This is with the exception of a rise in in-person purchasing in Beauty & Hygiene, Clothing, Footwear and Accessories and Sports footwear. However, each category had a higher proportion of respondents using online sources to purchase counterfeits than in-person sources.

Messaging

During the qualitative phase of research which followed on from the first survey, of which the results are explained above, messaging around reducing the levels of counterfeit purchasing was tested and co-created in an Online Community. The learnings from this qualitative phase informed another iteration of behaviour change campaign messaging, which was then tested in a second quantitative survey.

Respondents were shown a total of eight messages and asked how likely each message would be to dissuade them from purchasing in different categories of counterfeit products.

• overall, the same three messages were most effective across all counterfeit goods categories

• across all categories, messages about Health and Safety performed best. This was followed by messages about Organised Crime. Societal messages about working conditions etc. followed close behind, with other themes doing less well

• the repeated success of two messages relating to Health and Safety, i.e. addressing the danger to consumers of purchasing counterfeits, highlight the potential of a cross-category campaign, centred around this overarching safety message.

Recommendations

As in previous waves of this research, younger respondents (i.e. those aged under 34) remain those most likely to be active purchasers of counterfeit goods and should be the main audience to target for any behaviour change campaigns, whereas there were no significant differences at an overall counterfeit purchasing level by gender.

Consumers in some categories remain more likely to purchase counterfeits than others, though patterns of consumption in some categories is changing. Having grown in the past year, consumption in the counterfeit Toys category is now at similar levels as counterfeit Clothing, footwear and accessories. Levels of counterfeit purchasing in sports is also around the same mark, meaning it could be pertinent to look further into targeting these three categories (toys, clothing and sports) in particular.

Since the Covid-19 pandemic, purchasing counterfeits online has increased, as evidenced in last year’s study. In this third wave of the tracker, it appears that online purchasing has remained at consistent levels, solidifying online purchasing as the dominant trend as opposed to in person purchasing. This provides an opportunity to think about where behaviour change interventions might be best placed to interrupt the consumer journey.

The second quantitative survey in this study which looked at messaging efficacy showed that even when exposed to basic messages about the consequences of counterfeit goods, nearly half of the sample (48%) said such knowledge would prevent them from purchasing counterfeit goods in future. The testing also showed that a few of the most salient messages would likely be impactful across many different categories, albeit with a little variation. Importantly, this highlights the potential of a well thought out behaviour change campaign for counterfeit purchasing in general, as expanded upon in the dedicated reporting section on communications.

Qualitative summary

Besides exploring the reasons why consumers purchase counterfeit goods and where they purchase from etc, the qualitative research also sought to understand the context for consumers at the time of the research. With the Online Community live in early June 2022, the effects of the geo-political context and the ensuing financial instability were already being felt. Many in the Community spoke about the rising cost of living and the impact this was having on their purchasing decisions.

For many participants, any form of getting certain products more cheaply was currently particularly important because of the financial constraints on budgets. With counterfeits very much a part of this, some in the Community said they would likely purchase more counterfeits as the year and the cost of living crisis progressed. However, others said that their purchasing of counterfeits might decrease over the year, as they tried to spend less money overall and decrease their purchasing of any kind. Some felt that their purchasing of counterfeits wouldn’t change much even in the face of the cost of living crisis, while a few even said they might try to change tactics and invest in a few more authentic items in the hope that these would last longer and entail less repeat purchasing. There were no particular differences in these approaches across categories. The pattern of some increasing their purchasing of counterfeits, some keeping consistent and some reducing their purchasing of counterfeits bore out across all Clothing, Beauty and hygiene, Sports and Electrical products.

In relation to sourcing counterfeit goods, participants in our Online Community spoke of both online as well as offline methods of purchasing. For many, online shopping in general had become more the norm since the Covid-19 pandemic and national lockdowns. Many therefore said that they purchased counterfeits online just like they would much of their other products as this was easy, convenient and allowed for the perusal of reviews of products prior to purchasing. However, some participants elaborated on how they often preferred to purchase counterfeit products from local sellers, at market stalls or from individuals they find via word of mouth, due to being able to see, feel or smell a counterfeit product prior to purchasing and, in some cases, the assurance of being able to take a product home right there and then instead of having to wait for it to be delivered.

Again this year, participants were asked whether they had come across influencers on social media promoting counterfeit goods. Some influencers mentioned having seen people on TikTok talking about or actively promoting counterfeit goods they had come across which they wanted to recommend to others. A few said this had indeed triggered them to search out said products for themselves or at least to consider purchasing similar counterfeit versions. However, just as in previous waves, this remained a minority of people and most had not come across such promotion.

Section 2: Methodology

Research aims

While considerable evidence exists on the topic, to enable the 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 (OCI) tracker, there is a desire to establish a similar evidence base to inform decision-making around physical counterfeits.

In 2019 a benchmark study was established, followed by the second wave in 2021. This wave, the study’s third, builds on the ability to track and monitor physical counterfeiting 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.

Stage 1 (Quantitative)

The first stage of research comprised a large-scale, 15-minute,online survey among a representative sample of the UK adult population (aged 18+). Our sample size of N=5,000has allowed us to conduct robust analysis at the total and sub-group level(e.g. by age, gender, SEG etc.).Importantly, it has allowed us to explore behaviours relating to a range of industries in-depth.

The survey was live between 25th April - 9th May 2022 and sample was sourced through our network of professionally managed (ESOMAR compliant) online UK consumer research panels. We have ensured that data is representative of the general population (by setting quotas and applying a weighting factor). Respondents were asked about both their general and counterfeit purchasing history and habits across 6 broad product categories which (in total) covered 21 individual categories.

The third iteration of the Physical Counterfeit Tracker maintained consistency with previous waves across key metrics, allowing for wave-on-wave trend analysis. Additions were also made to expand and refine the insights gathered. The changes made included:

• a new section on the reporting of Intellectual Property infringement
  - This section covered past experiences with and knowledge of reporting methods as well as key factors impacting respondents’ decisions as to whether or not to report infringement.

• a series of questions unique to the alcohol category
  - These questions covered awareness of counterfeit alcohol, sources of counterfeit alcohol purchasing and steps taken before purchasing a counterfeit alcohol product

• a question testing likelihood to purchase counterfeits in the future

• an additional question aimed at fostering a deeper understanding of general purchasing behaviours and attitudes

• routine tweaks to question wording and response options

Categories covered

Beauty and hygiene

• cosmetic and toiletry products
• hygiene products

Clothing, footwear and accessories

• clothing excluding sportswear
• footwear/shoes excluding sports footwear
• accessories excluding watches
• watches

Sports

• regular sportswear
• sportswear from clubs/franchises
• sports footwear (i.e. trainers) from sports or fashion brands
• sports equipment including for home workout

Toys

• dolls/action figure toys
• toy building sets
• merchandise from TV/Film excluding dolls/action figures

Electricals

• beauty/hygiene related electricals
• electrical accessories
• electrical devices
• DVDs and Blu Rays

Alcohol

• bottles of wine/champagne
• bottles of spirits (e.g. vodka)
• bottles/cans of beer or cider

Stage 2 (Qualitative)

The qualitative stage consisted of a week-long discussion in our Online Community platform, running from the 6th-12th June 2022. Its focus was to understand the reasons behind displayed attitudes and behaviours, especially as the country emerged out of the Covid-19 pandemic but into a cost of living crisis. The Online Community also sought to test behaviour change messaging and culminated in tasks in which participants co-created the type of communications they believed would be most effective in deterring the purchase of counterfeit goods.

64 participants were invited into the Online Community, from a pool of respondents who had taken the survey in the previous stage of this study. Four categories were explored in depth in the qualitative research, due to high incidences of counterfeiting shown in these categories in the survey. As opposed to the survey in which categories were broken out into subcategories (e.g. Sportswear v sports equipment), the qualitative research treated each category as a whole (e.g. sports overall), given the smaller sample size.

Within the Online Community sample, we focussed on those aged 35 and under, due to the higher incidences of counterfeit purchasing in these age groups, although some participants aged 36-54 were also included in order to understand any differences in behaviours. All participants were intentional purchasers of counterfeits and had knowingly purchased a counterfeit product in the last year.

The Online Community itself covered the following topics: the importance of each product category to participants; reasons for purchasing products in each category; methods of purchasing counterfeits; whether the cost of living crisis was having an impact on purchasing behaviours; and reactions to statements about the consequences of the counterfeit trade.

Categories covered

beauty and hygiene

• cosmetic and toiletry products
• hygiene products

clothing, footwear and accessories

• clothing excluding sportswear
• footwear/shoes excluding sports footwear
• accessories excluding watches
• watches

sports

• regular sportwear
• sportswear from clubs/franchises
• sports footwear (i.e. trainers) from sports or fashion brands
• sports equipment including for home workout (e.g. rackets, bats, football, bikes, exercise machines etc)

electricals

• beauty /hygiene related electricals
• electrical accessories
• electrical devices
• DVDs and Blu Rays

Stage 3 (Message testing - Quantitative)

The insights gained in the previous two stages of the research were used to develop 8 statements, all aimed at informing consumers about the consequences of the counterfeit trade.

These statements were tested in a survey with non-rejecters of counterfeits (including those who either had purchased, currently purchased or were open to purchasing counterfeit goods).

The survey explored whether each statement would be likely to prevent respondents from purchasing counterfeits in any of the counterfeit categories focussed on throughout this research.

In total, n=1,500 completed the survey.

Fieldwork for the survey took place between 22nd-30th August 2022.

The survey included questions on the following topics:

• profiling (e.g. demographics)

• counterfeit purchasing history

• messaging evaluation (whether the information would be likely to impact their purchasing of each counterfeit category)

Navigating this report

The report begins with an overview of counterfeit purchasing.

Each content category then has its own bespoke section. Qualitative insights are included for content categories covered within the online community.

Following this is a section which explores the effectiveness of messaging aimed to reduce the amount of counterfeit purchasing.

The report ends with a summary of key findings relevant for future behaviour change campaigns. Results are largely based on the communications testing and co-creation activities conducted in the qualitative research.

Interpreting the data

• due to the changes in the way some levels of infringement are captured, direct comparisons between infringements for certain categories should include methodology checks

• where (single choice) question percentages do not add up to 100%, this is due to rounding of the data

• where base sizes are below N=30, results must be interpreted with caution

• margin of error: with any piece of research, it is almost never feasible to measure the entire population and thus achieve results that are 100% accurate. We must, therefore, take into account the potential for error. As a guide, we advise caution when interpreting results that have less than a (-/+) 3 or 4% difference

• changes in behaviour (e.g. in shopping habits) precipitated due to Covid-19 should be borne in mind when making comparisons between the first and second waves