This blog post examines whether the production and consumption of counterfeit goods is an inevitable phenomenon or simply an economic choice, exploring various perspectives.
Counterfeits permeate our lives more deeply than we might think. Moreover, as counterfeiting techniques evolve, they create headaches for honest companies. The Chery QQ model, once dubbed the ‘counterfeit Matiz’ for mimicking GM Daewoo’s ‘Matiz’, drew significant attention in the automotive industry. At the 2015 Shanghai Motor Show, a Chinese automaker unveiled a concept car called the ‘EMGRAND,’ which masterfully combined the best features of Kia’s ‘K5’ and Renault Samsung’s ‘SM5’. Additionally, China’s Z Company introduced the ‘E200’, which imitated the design of the German automotive brand ‘Smart’. These knockoff models go beyond simply targeting niche markets; they threaten established automakers by offering prices that are only one-third of the original models.
Meanwhile, the influence of counterfeit companies has grown to the point where they sometimes acquire the original companies. Segway was a company that gained popularity among Hollywood stars with its two-wheeled scooters. However, even Segway, with its 15-year history, ended up being acquired by the counterfeit company ‘Ninebot’, which had sued Segway for patent infringement, claiming Segway had copied its products. Segway essentially succumbed to Ninebot’s financial power. Conversely, companies that once succeeded through counterfeit strategies can sometimes be tripped up by the same tactics. Xiaomi, which rapidly rose to become the world’s third-largest smartphone brand, initially appealed to consumers by aggressively adopting an ‘Apple imitation’ strategy, earning it the nickname ‘Counterfeit Apple’ from its founding days. Later, Xiaomi gained immense popularity with its Mi Power Bank series of smartphone power banks, touting low prices and high performance, growing into China’s largest smartphone manufacturer. However, Xiaomi, now famous for this knockoff strategy, is also facing headaches recently due to companies selling counterfeit power banks.
Counterfeiting isn’t confined to manufacturing; it persists in the cultural industry too. When the Korean Wave swept the globe, China saw the emergence of so-called “fake Girls’ Generation” groups mimicking the Korean idol group. Many composers and singers also find themselves embroiled in plagiarism controversies. Thus, today’s counterfeit products have reached a scale and influence that cannot be ignored.
So what defines the line between genuine and counterfeit? The criteria for this can vary from person to person. Where does one draw the line between an original creative work and a mere imitation? Dictionaries define ‘intellectual property rights’ as ‘property rights pertaining to the products of human mental creative activity.’ In other words, they are rights granted to works produced through original creative activity. However, according to this definition, cases like the aforementioned ‘fake Matiz’ or ‘Ninebot’ clearly possess differences from the original products. Couldn’t these differences be considered ‘products of intellectual creative activity’? In reality, the criteria for such judgments are unclear, and court rulings often vary depending on the circumstances. The lawsuits between Samsung and Apple also arise from a similar context.
So why do people produce and consume counterfeits? Let’s explore this from social, psychological, and evolutionary perspectives.
First, consider the social aspect. Today’s society values ‘ideas’ more than ever before. In past agricultural or industrial societies, the process of creating products using available resources was paramount, and success hinged on securing capital and labor. However, as quality of life has improved and the service and cultural industries have grown in prominence, the importance of creative and attention-grabbing idea-based products has come to the fore. For example, Apple achieved global success with the innovative idea of the iPhone, and director Michael Bay generated $1.0874 billion in box office revenue with the film ‘Transformers’ based on a single unique concept. Yet, coming up with truly novel ideas is never easy. Every day, dozens or even hundreds of startups launch with ideas, but most fail to realize their dreams and close their doors. Creativity involves pain, and even enduring that pain to produce a novel idea offers no guarantee of success. Therefore, slightly modifying and using existing successful examples can be a way to lessen the pain of creation and reduce the probability of failure.
What about from a psychological perspective? Modern society is filled with various ‘replica’ products. It’s common to see women using replicas of brands like ‘Chanel’ or ‘Louis Vuitton’. Replica products of high-end overseas streetwear brands like ‘Supreme’ and ‘Bape’ are also frequently seen. So, what is the psychology behind people using replica products? Might feelings like ‘pretense’, ‘compulsion’, or ‘inferiority’ reside deep within their hearts? In modern society, people feel ‘loneliness in a crowd’ and live with the anxiety that they might drift apart from others at any moment. This phenomenon is particularly pronounced in South Korea, which ranks first in suicide rates and near the bottom in happiness indices among OECD nations. The high suicide rate among celebrities, who seemingly live glamorous lives, is not unrelated to this. Many people suffer in loneliness, unable to bridge the gap between their true selves and their masks. Those left with only the desire to appear good to others eventually put on a mask, which leads to the use of replica products.
Finally, let’s consider this from an evolutionary perspective. Charles Darwin introduced the concept of natural selection in his 1859 work, On the Origin of Species. Natural selection is the theory that suitable individuals are selected through interaction with the environment, leading to genetic change. However, stronger than natural selection is ‘sexual selection’. Sexual selection is the phenomenon where traits advantageous in mating competition are preferred. The peacock’s large tail feathers, though useless for flight and highly visible to predators, are tolerated by males to appeal to females with good genes. Consumers of counterfeit goods in modern society can also be interpreted from an evolutionary perspective. As mammals, humans are also subject to sexual selection, and modern individuals perceive appearance and brand as crucial competitive factors. This is why counterfeit products are consumed.
