Sep 21, 2022
The boom in demand for wearable electronics and accessories in India has also given impetus to a parallel offline and online market for counterfeit goods, which includes counterfeit, stolen and illegally imported goods. Lack of measures to prevent counterfeiting, as well as cheap wholesale sourcing from China, were cited as a major reason for the increase.
For example, Chinese consumer electronics company Xiaomi said it seized more than 9,000 counterfeit products worth ₹73.8 lakh in the first half of 2022 alone, while only 3,000 products of a worth ₹33.3 lakh were seized in 2020. massive piracy of products, such as headphones, chargers, adapters and USB cables,” said Muralikrishnan B, President of Xiaomi India.
He told Mint that there are centers in major Indian cities that process early copies of gadgets. After covid-19, counterfeit products are now also being sold on websites and e-commerce platforms, he added.
Similarly, Samsung subsidiary Harman International, which sells audio products under JBL, AKG, Harman Kardon, Infinity and several other brands, announced earlier this month that it had seized speakers and subwoofers from counterfeit JBL and Infinity car in shops and manufacturing units in Delhi during raids carried out with the help of police.
The audio company said its high-end products were counterfeit and sold at “reduced prices” and “reduced quality”.
“In products like wearables and hearing aids, it’s very easy to create counterfeit products,” said Faisal Kawoosa, founder and chief analyst at TechARC. He added that these products can also be easily purchased in China.
He added that their spread has increased due to the lack of strong controls by online marketplaces, and although offline marketplaces are the main breeding ground, “anyone can list and sell products (online)”, which facilitated the sale of counterfeits.
Unlike smartphones, where police can use International Mobile Equipment Identity (IMEI) to track and identify phones, accessories like headphones, etc. do not have the same measurements. Additionally, companies like Apple and Google have built in measures to remotely lock, erase, and track stolen cellphones. Apple even allows users to track accessories like Airpods through their phones. Such options are not available for cheaper accessories, which make up the bulk of the Indian market.
Industry experts have also warned that counterfeiting poses serious financial risks to businesses and safety risks to consumers. “Counterfeit products in consumer electronics harm economic development, leading to problems such as risk to consumers’ lives due to poor quality and lack of controls, tarnished brand image and tax evasion “, said Muralikrishnan.
In September 2019, a report by the Federation of Indian Chambers of Commerce and Industry (Ficci), stated that the Indian economy loses ₹1.17 trillion annually due to smuggling and counterfeiting in five sectors , including consumer electronics. Since then, the home accessories market – which includes true wireless headphones, wireless and wired headphones, power banks, smartwatches and wearable speakers – has only grown, giving even more stimulus to counterfeiters.
Many offline retailers are deliberately stocking and selling counterfeit products to cater to customers looking for low-priced products, warned Manish Khatri, partner at Mahesh Telecom, a Mumbai-based mobile retail store.
“Retailers like us only sell branded products. However, many retailers only sell accessories, and many sell counterfeit products to customers who want brand name products at lower prices. Consumers may not know it, but retailers know which products are fake and which products are real,” he added.
He also said that many counterfeit products, such as watches, speakers and headphones, are sold in the name of Indian brands, such as Boat and Noise.
Kawoosa pointed out that local brands selling accessories at low prices buy wholesale products from China and sell here with huge markups. Brands, too, turn a blind eye because they see it as an opportunity to make their products better known.