#International – Luxury brands are betting big on India, and so are counterfeiters – #INA

New Delhi/Kolkata, India – A pair of black Dandy Pik Pik loafers covered in sharp, uneven spikes and shiny studs was part of the evidence before Judge Pratibha M Singh in an intellectual-property lawsuit brought by French luxury shoe brand Christian Louboutin against an Indian shoe manufacturer in a Delhi high court last year.

Louboutin’s lawyers had already regaled the court with anecdotes about the iconic status of their shoes. The signature stilettos, with their luxuriant red soles, had starred in movies like The Devil Wears Prada and Sex and The City, and were registered as a trademark in India and other countries, they said.

Riding on the brand’s reputation, the lawyers were now trying to make the point that spiked shoes, too, were unique to Christian Louboutin, and the defendant, Shutiq – The Shoe Boutique, was manufacturing and selling their designs in India illegally.

Incriminating evidence presented to Judge Singh included testimony from ChatGPT, saying that Christian Louboutin is known for spiked men’s shoes. Then there were photographs of Shutiq’s 26 spiked and bedazzled shoes next to Louboutin originals, including Dandy Pik Pik. The original loafers retailed for about $1,800, but their imitations were being sold by Shutiq for one-tenth the price.

The judge dismissed the ChatGPT testimony but imposed a fine of $2,370 and told Shutiq that if it did not stop copying Louboutin’s designs, she would fine the store $29,628.

For Louboutin, which had made $2.6m from shoe sales in India in 2022, the money was paltry, but the court order was a significant win.

Louboutin, like Louis Vuitton, Hermes, Rolex, Cartier and many other high-end international fashion brands, is investing in and expanding its presence in India – the fastest growing market for luxury brands in Asia – even as these brands are spending time and resources to take down cheap fakes.

“The problem is very serious. There are a lot of fakes (in India) of high-value, expensive goods,” a senior official from the Federation of Indian Chambers of Commerce and Industry’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (FICCI CASCADE), an industry body devoted to creating awareness about counterfeit and smuggled goods, told Al Jazeera.

A report by FICCI CASCADE has pegged the annual loss in taxes due to counterfeits of just five products – alcohol, tobacco, mobile phones, FMCG (fast-moving consumer goods, such as soft drinks) packaged foods and personal goods – at about $7bn.

More worrisome are spurious auto parts that account for about 20 percent of road accidents and that one out of every three antibiotics sold in India is fake.

India is a signatory to the World Trade Organization’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and has several laws to stop the manufacture and sale of counterfeits and to penalise counterfeiters with fines and jail terms. But there is no real interest in fighting fakes.

“Elected governments act on things that get them votes,” the FICCI official said. Counterfeits do not make the list.

While counterfeiting is not new, access to fake goods has become easier with the rise of social media. Online sales, which got a boost during the pandemic, are now speeding up on the back of the rising aspirations of Gen Z and millennials in the world’s fastest-growing major economy.

Counterfeit luxury items have moved from stores run by middle-aged traders in seedy, crowded markets to swanky boutiques run by suave, ambitious young men and women in cities big and small. Most of these counterfeiters run Instagram handles and have thousands of followers, a bevvy of influencers they collaborate with, and a clientele that includes some of India’s top television stars and celebrities.

Several Bollywood stars have been called out for flaunting fake bracelets, bags and even couture gowns. Some of them are brand ambassadors of luxury brands.

According to the FICCI official, fakes can be found across most product categories, including medicine, spices, baby food, mineral water, software, cigarettes, alcohol, gold biscuits and luxury items.

The “costlier the brand, (the) more the profit margins – thus more duplicates, more fakes”, the official said. He calls counterfeiting “a low-risk, high-profit crime” because “the chances of being arrested are low and penal provision is not harsh”.

In May, Christian Louboutin was back in the Delhi high court. Of the 26 designs it had listed in its lawsuit, Shutiq – The Shoe Boutique was still manufacturing and selling nine. The case is ongoing.

Designer handbag a ‘moniker of success’

Luxury brands have leased more than 600,000 square feet (55,741sq metres) of retail space in India, up 178 percent from the previous year. The country’s luxury market clocked revenue of $17.6bn in the fiscal year 2024 and is expected to grow annually at a compounded rate of 3.16 percent, according to data research firm Statista.

That bullishness is visible at Reliance Industries’s four-storey luxury mall, Jio World Plaza, in India’s financial capital Mumbai, which offers a butler service and personal shoppers.

But a 25-minute drive from Reliance’s luxury haven is the Heera Panna Shopping Complex, which is listed by the United States as one of the world’s most “notorious markets” for counterfeit products. Most shops here offer two qualities of each luxury product: “first copy” or “AAA”, which is close to the original, and a cheaper version.

Six Indian markets – one each in New Delhi, Mumbai and Bengaluru, and three online – have made it to the US’s notorious market list, including IndiaMart, an online B2B wholesale marketplace where everything is available on order.

Al Jazeera posted a query on IndiaMart regarding ladies’ handbags. Manufacturers were ready to replicate any bag, shoe, wallet or belt if a physical product was provided to them, including from the just-concluded Paris fashion week.

Al Jazeera also received messages from a person who claimed to be an employee of John Lewis, a chain of high-end department stores across the United Kingdom, and offered their original leather bags, which are manufactured in India, at a discounted rate.

India’s rising number of millionaires and billionaires has made it the 10th wealthiest country in the world. But the average income of its aspirational middle class, 31 percent of the population, is 1.3 million rupees ($15,400) on average annually.

In a survey last year, 89 percent of respondents said they were compelled to buy luxury counterfeits due to “desire, affordability and social motivations”.

“A designer handbag is a moniker of success,” Paul Russell, a consumer behaviour psychologist at the UK-based Luxury Academy, which trains luxury professionals, told Al Jazeera.

A well-crafted counterfeit luxury item can offer the same social currency and emotional rewards as the original.

“When people buy a luxury item, they’re not just buying a product, they’re buying into a lifestyle, they’re becoming part of an exclusive club – one that not everyone can join. Hence the hunger for fakes,” says Russell.

It is also a “reasonable” way for India’s millennials and Gen Zs – expected to be half the country’s population by 2030 – to keep up with fast-moving trends – “a major driving force”.

But the wealthy, too, buy cheap copies, says Sanjana Gupta, who restores luxury goods at her store, The Leather Works.

Since she started her company in 2018, Gupta says her business has grown “six- to seven-fold”, and so have fakes she sees in society, she adds, recalling a Delhi-based client whose batch of 10 Chanel, Dior and Prada products had six fakes, a fairly common occurrence for her now.

Counterfeiters prefer brands where logos are conspicuous and often part of the design.

Among Gupta’s wealthy clientele, she says, Chanel is the number one in fakes, followed by Louis Vuitton and Dior.

From China to Kolkata, on $14

“Good luck karenge! (Bring me good luck!) You are the first customer,” chirps a smiling shopkeeper in the labyrinthine Fancy Market in Kolkata’s old, congested Khidirpur area near the sea.

It is a common greeting in this maze of small shops where you can buy a complete wardrobe of luxury fakes. A Balmain bag, which retails for about $800, sells here for $70. There are Fendi and Prada sunshades for $11.

The market sells Mont Blanc and Ferrari fountain pens; Tommy Hilfiger luggage; Christian Dior totes; Chanel and Marc Jacobs backpacks; Hermes flip flops; Rolex, Tissot, Tag Heuer and Michael Kors watches; and Gucci and Versace belts. And in the midst of French, Italian, US, Swiss and British brands, there are bags and accessories of the most counterfeited Indian designer, Sabyasachi.

Every counterfeit item here is billed as a “mirror copy” or of “showroom quality”, and comes with all the frills and thrills of the original.

Ladies’ handbags, their handles wrapped in white foam, sit inside a dust cover in a branded box. There is also a receipt, mostly in Mandarin, and inside the bag, a little tag with a QR code that can be scanned to see product details. But like the fake bag, the QR Code is also fake and leads nowhere.

Business is slow because most customers are online.

A ladies’ bag seller put this reporter on his WhatsApp group and has been sending photos and videos of branded purses. He promises delivery in five to seven days for bulk orders.

A shopkeeper, speaking on condition of anonymity, said small groups of counterfeiters travel once or twice a year to Guangzhou in China where, over a week or 10 days, they visit shops that stock counterfeits of the world’s top brands. Three different qualities of each item are available – first copies, mid-range, which are suitable for stores and boutiques, and the cheapest quality for mass sale.

Consignments are booked with 100 Chinese yuan ($14). The receipts for those bookings are collected by the “carrier”, and the products are delivered within a few weeks. The carrier charges $10.66 per kilogramme for branded stuff, and $6-7 per kilogramme for non-branded stuff, the shopkeeper told Al Jazeera.

At the entrance to Fancy Market is a police booth. While police officers sometimes carry out raids, mostly, they sit idle.

Lenient courts and the luxury of silence

Priya Gaekwar, who runs the luxury advisory firm Lighthouse Consultants, says that LVMH Moët Hennessy Louis Vuitton “is probably the most hardcore, the most organised amongst the international brands in fighting counterfeits”.

Gaekwar, who has worked with the brand, says LVMH has a dedicated team of lawyers and investigators who are vigilant on the ground and online.

Louis Vuitton has filed more than 20 trademark and counterfeit lawsuits in India. Christian Louboutin has filed about seven. Gucci, Cartier, Rolex, Hermes, Yves Saint Laurent and Burberry have all gone after counterfeiters, big and small, but their victories have been short-lived.

Fighting counterfeits – whether imported or manufactured locally – is a daunting battle. Indian designer Tarun Tahiliani says it feels like playing whack-a-mole on a football field when you are armed only with a very small hammer.

Tahiliani had been the designer who dressed Kim Kardashian in a dusty peach lehenga – a traditional Indian long skirt that is worn with a blouse and a scarf – for an event at India’s richest person Mukesh Ambani’s son Anant’s star-filled wedding in July. He recalls visiting Delhi’s Chandni Chowk market a few years ago. The crowded, bustling area is known for knock-offs of designer bridal wear.

“Someone tried to sell me a Tarun Tahiliani bridal ensemble … It actually happened,” he says, laughing at the memory of sitting in a shop and watching salesmen walk up and down a ramp preening and holding knockoffs of his designer lehengas to their waist. “It was fascinating.”

He has not bothered to sue because the last time he filed a case, it went on for seven years. “By the time the case came to trial, the (witness) had died … it was too far gone. We just settled. Fashion changes very fast. So the best thing is to let people know that you’re going to go after them, but you can’t really do much,” Tahiliani said.

Fines are modest, and jail terms are usually just a few months. “Fear is lacking, so deterrence is not there,” he said.

While some luxury brands take extreme measures, like burning their surplus stock worth millions of dollars, to avoid their merchandise from entering the grey market, the problem of their designs being counterfeited is not something they want publicised.

“Brands don’t want the narrative to shift from their latest collection or philanthropic efforts to a less flattering focus on how they are fighting counterfeiters,” Russell said.

Al Jazeera reached out to Christian Louboutin, Louis Vuitton and Ambani’s Reliance Brands Limited – which has the India licences for Balenciaga, Bottega Veneta and Coach, among others – for comment. All three declined. Hermes and Burberry did not respond.

Fake sites and child pornography

Criminal lawyer-turned-counterfeit-buster Dhirendra Singh, with his muscular body and bald head, looks like the chief of a commando unit. He chuckles as he recalls a recent bust.

“There was this couple, this husband-wife duo – when we started investigating them, we called them ‘Bunty and Babli’,” he says, referring to a popular Bollywood film about a couple that pulls off audacious cons.

On their Instagram account, the couple would advertise discounted sales of “branded apparel” in a banquet hall of a five-star hotel located in several cities, running up sales of $100,000 to $200,000 in each city.

When Singh and the police finally caught the couple in a town near Delhi, counterfeits of garments from several brands, including US Polo, Benetton, Adidas, Tommy Hilfiger, Nike and Puma, were confiscated.

Singh, the CEO of Brand Protectors India, says that “filing civil suits under the civil law is a toothless exercise”. He prefers what he calls “direct raid action”.

In “criminal raid actions”, the counterfeiters are arrested and counterfeit goods seized. “Now, that’s a dead loss for a counterfeiter running into (hundreds of thousands) of rupees. Counterfeiters are very smart people. If a brand has a zero-tolerance policy against duplicates and aggressively carries out raids, counterfeiters shift brands,” he adds.

Raids require months of planning and coordination with local police and courts in secrecy, and they can be rough. Singh, who has conducted more than 2,300 raids on counterfeiters so far, has been offered bribes, stabbed multiple times and had his vertebrae, tibia, shoulders and hip joint broken.

And, he says, just as he watches counterfeiters, they keep an eye on him.

“Would you believe that half of the subscribers on our YouTube channel are counterfeiters?”

Every year, during India’s four-month-long festive season, which begins in September and coincides with the wedding season, there is a major uptick in the demand and sale of counterfeit luxury brands.

“(Online) sales are like the bread and butter for counterfeiters. That’s when you have a high percentage of fake products being sold,” says Vikas Jain, founder and CEO of Acviss, a Bangalore-based tech company that provides brand protection and anti-counterfeiting solutions to companies selling luxury and other products.

Counterfeiters use heavy discounts and sales – like “the great festive sale”, “anniversary sale” and “season sale” – as enticing bait.

Feeding off the growing desire for branded, luxury goods, scammers, too, have entered the fray with fake sites that have domain names that sound authentic (like Balenciaga-india.com) and sell heavily discounted “originals”.

A few months ago, Singh was attempting to buy a pair of Yonex badminton shoes from a fake website he was investigating. During the transaction, he received a call from the bank informing him that the transaction was being routed through a child pornographic website.

“It’s a mind game. Customers, while waiting for shoes, will get a bill from a child pornographic site. Who will go to the police to complain? Most people will just keep quiet.”

And even if they are reported, counterfeiters have learned how to circumvent algorithms and legal traps.

Dupes, influencers and Bollywood clients

Mohit (not his real name), a bearded man in his 30s, is the owner of a small boutique in a middle-class neighbourhood in Delhi, which sells fakes of “trending” luxury items. He also runs a popular Instagram handle and advertises the latest Balmain and Amiri jackets, Armani and Louboutin shoes, Dolce & Gabbana slippers, Gucci jeans and Chanel dresses to his 127,000 followers, often uploading seven to eight reels a day.

After his Instagram handle was reported for peddling fakes multiple times, he learned to work his way around the platform’s algorithm.

All the hashtags – #cheap, #original, #AAA, #1:1 – which had brought him customers, have been dropped. Instead, in his videos, he unboxes items for sale and shows the logo repeatedly, but does not mention the brand. The text that appears on his reel usually is “100% OG”, short for original, next to the price and a WhatsApp number.

In India, social media influencers have significant sway over people’s buying decisions, multiple surveys have found. It is thanks to such marketing tactics and “dupes” – or duplicates – that luxury fakes now have their own ecosystem of counterfeiter influencers.

One of the celebrities Mohit collaborates with is a popular contestant of Big Boss, an Indian reality show. With his two wives, the man has 21 million followers on Instagram. The family regularly flaunts a lavish lifestyle to their followers, replete with luxury cars and dressed in fake branded clothes and shoes they got from Mohit’s store.

Mohit also claims to have a long list of Bollywood clientele. He showed Al Jazeera photos on his phone of some of India’s top television stars wearing jackets, sweatshirts and shredded jeans that he had sent them.

“I don’t know if they know that these are copies. I deal with their managers mostly,” he said.