Counterfeits cause billions of dollars loss in Africa

May 9, 2017

According to data available, proliferation of counterfeit products is rampant in the Africa market and cause losses running into tens of billions of dollars to the African economy. African governments also suffers loss in taxes on sales. The largest fake product categories in the market are cosmetics, printer ink, clothes, leather products and software.The economic losses could be prevented if all stakeholders like producers, sellers, law enforcement authorities and consumers cooperated to fight against such products. Counterfeiters have become so sophisticated, it seems even retailers are getting duped. In South Africa, a local supermarket is facing court action for allegedly placing fake cosmetics on its shelves last year. According to the company that took it to court, it tested the products and found they were counterfeit. While the South African supermarket hasn’t admitted the cosmetics were fake, it’s come to light they didn’t order the product through official channels.Sourcing legitimately branded products through unofficial channels is legal in South Africa and almost everywhere in Africa. For African retailers, it is a powerful way to reduce costs for consumers through increased competition, and products sourced that way aren’t necessarily counterfeit or a safety concern. Such products according to the case documents, are subject to the same safety regulations and standards as products bought through more established supply chains in South Africa.In Nigeria and Kenya, data shows that local supermarkets are looking into sourcing more products through alternative imports, because it is more cost effective. One of the supermarket who was involved in the study, is quoted as saying “When we know we are not getting a good deal through local suppliers, we are willing to take up parallel importing opportunities where there can be a guarantee on quality, supply, regulation and standards compliance,” said a Kenyan supermarket manager. However the said manger didn’t supply information to researchers on how they protect the supermarkets’s supply chains from counterfeits.In Nigeria, knock-off products are no longer easily identified by misspelled logos and shoddy craftsmanship, as researchers discovered.

In one case in Lagos, the researchers were unsure whether the shoes branded Nikes were genuine or fake as they paid less than a third of would have for the same in Europe. The salesperson said they were counterfeit, but when researchers asked someone at Nike in US they couldn’t tell. The quality of counterfeit products appears to be improving, and counterfeiters in Nigeria have gotten smarter when it comes to marketing their products. Techniques such as paid search results ads and search engine optimisation are being used by counterfeiters to lure people to their sites, and dodgy sellers sometimes use images from a brand’s most recent advertising campaign to boost their credibility. In one case where your blogger was directed by researchers, he was able to watch adverts similar to those real vendor promoting a carbon copy of that particular vendor’s latest product. Sporting equipment, electronics, pharmaceuticals and cosmetics retailers are leading in business of counterfeit sales and many are sold online which is unregulated and may be produced in unsanitary conditions especially when it comes to fake medicine. In Nigeria and South Africa there have plenty of reported cases where counterfeit perfumes are said to have caused skin allergies, burn the skin, triggered respiratory problems and stain clothes to thousands of women over the last few years. Shopping online and taking advantage of alternative imports is riskier than buying direct from authorised suppliers, but both methods present opportunities for consumers in Africa to get a better deal. However, many African consumers looking for a bargain online have been duped into buying counterfeit products. The rise in the popularity of online shopping is responsible for the increase.Things have escalated in recent years due entirely to the internet.The value of counterfeit products intercepted in Africa reached an all-time high last year, with counterfeit products total estimated value of $15billion based on the equivalent value of genuine goods according to the official data available. In Nigeria and South Africa, counterfeits are estimated to account for about sixty per cent of intra Africa trade. Official figures in your blogger’s possession show the majority of fake products entering Africa come from China, India and South-East Asia. Experts I spoke to see those places as the hub, with 90 per cent of counterfeit seizures in Africa between 2012 and 2016 having been manufactured there.Africans have taken to online shopping with a vengeance, and passion for it shows no sign of going away. Although there are many benefits to online shopping, it leaves African consumers more exposed to the risks of counterfeit products, better to have in mind risks involved too.

Contador Harrison