In this blog post, we will look at the production and consumption of counterfeit products from various perspectives to see if it is an inevitable phenomenon or a simple economic choice.
“Fake” has penetrated our lives deeper than we think. The technology for imitating has also evolved, causing honest companies to suffer. The ‘Chery QQ’ model, once called the ‘fake Matiz’ for imitating the Matiz of GM Daewoo, has attracted attention in the automotive industry. At the 2015 Shanghai Motor Show, a Chinese automaker unveiled a concept car called “EMGRAND” that exquisitely combines the best features of Kia’s “K5” and Renault Samsung’s “SM5.” In addition, Chinese company Z introduced the “E200,” which imitates the design of the German car brand “Smart.” These knock-off car models are not just targeting niche markets, but are threatening existing car companies with prices that are only one-third of the original model.
On the other hand, there are cases where the influence of a counterfeit company grows so much that it even takes over the original company. “Segway” was a company that became popular among Hollywood stars for its two-wheeled scooters. However, even Segway, which has a 15-year history, was acquired by a counterfeit company, Ninebot, which filed a patent infringement lawsuit, claiming that its products were imitations. Segway has succumbed to the financial power of Ninebot. On the other hand, a company that once succeeded with a knock-off strategy can be held back by the same strategy. Xiaomi, which has rapidly risen to become the world’s third-largest smartphone brand, has been nicknamed the “Apple knock-off” since its inception, appealing to consumers with a strategy of “copying Apple.” Since then, Xiaomi has become the largest smartphone manufacturer in China by becoming very popular with its ‘Mi Power Bank’ series of smartphone power banks, which are known for their low price and high performance. However, Xiaomi, which became famous for its knockoff strategy, has also been suffering from companies selling knockoff power banks in recent years.
Counterfeits are not limited to the manufacturing sector, but still exist in the cultural industry. When the Korean Wave swept the world, so-called “fake Girls’ Generation” emerged in China, imitating the Korean girl group Girls’ Generation. Many composers and singers are also embroiled in plagiarism controversies. As such, today’s counterfeit products have reached a level where their scale and influence cannot be ignored.
So what is the criterion for distinguishing between the real and the fake? The criteria for this may differ from person to person. Where does one draw the line between what is considered an original work of art and what is considered a copy? The dictionary defines “intellectual property rights” as “property rights for the products of human mental creative activities.” In other words, it is the right granted to works produced through original creative activities. However, according to this definition, there are clear differences between the aforementioned ‘fake Matiz’ and ‘Ninebot’ and the original products. Can these differences not be seen as the product of mental creative activity? In fact, the criteria for making such judgments are not clear, and the courts often make different decisions depending on the situation. The lawsuit between Samsung and Apple is taking place in a similar context.
So why do people produce and consume counterfeit goods? Let’s discuss this from a social, psychological, and evolutionary perspective.
First, let’s look at the social aspect. Today, our society values ideas more than ever. In the past, in agricultural and industrial societies, the process of producing products using available resources was important, and the key to success was how much capital and labor could be secured. However, today, as the quality of life improves and the service and cultural industries grow in importance, the importance of creative and attention-grabbing idea products is becoming more prominent. For example, Apple achieved worldwide success with the innovative idea of the iPhone, and director Michael Bay earned $1.0874 billion in box office revenue with the movie “Transformers” with a single unique idea. However, coming up with fresh ideas is not easy. Every day, dozens or even hundreds of startups launch with ideas, but most of them fail to achieve their dreams and close down. Creation is painful, and even if you come up with a fresh idea by enduring that pain, there is no guarantee of success. Therefore, using a slightly modified version of an existing successful example can reduce the pain of creation and the probability of failure.
What about from a psychological perspective? In modern society, there are various ‘replica’ products. It is easy to see women using replicas of brands like ‘Chanel’ or ‘Louis Vuitton’. Replica products of expensive overseas street brands like ‘Supreme’ and ‘Bape’ are also commonly seen. Then, what is the psychology of people who use replica products? Don’t they harbor feelings of “pretension,” “obsession,” and “inferiority” deep in their hearts? In modern society, people feel “loneliness in the crowd” and live with the anxiety that they might be alienated from others at any time. This phenomenon is even more pronounced in South Korea, which has the highest suicide rate among OECD countries and a low happiness index. The reason why even celebrities who live glamorous lives have a high suicide rate is also related to this. Many people suffer from loneliness without being able to narrow the distance between their true selves and their masks. People who only want to look good to others end up wearing masks at some point, which leads to the use of replica products.
Finally, let’s think about it from an evolutionary perspective. Charles Darwin proposed the concept of natural selection in his 1859 book On the Origin of Species. Natural selection is the theory that genetic changes occur when suitable individuals are selected through interaction with the environment. However, even stronger than natural selection is sexual selection. Sexual selection is a phenomenon in which individuals prefer traits that give them an advantage in the mating competition. Peacocks’ large wings are not only useless for flying but also make them easy targets for predators, but males endure this inconvenience to appeal to females with good genes. People who consume knock-off products in modern society can also be interpreted from an evolutionary perspective. Humans are also mammals subject to sexual selection, and modern people recognize appearance and brand as important competitive factors. This is why counterfeit products are consumed.
