Counterfeit production and consumption: inevitable or a simple economic choice?

Counterfeit products are becoming increasingly influential in many sectors, including automotive, electronics, and cultural industries, and their production and consumption is a complex phenomenon that is influenced by social circumstances, psychological factors, and evolutionary instincts. With controversy surrounding the scope and criteria of counterfeiting, it can be interpreted as a phenomenon that goes beyond simple economic choices.

 

Counterfeiting is more embedded in our lives than you might think. And the technology to copy them is evolving, causing headaches for honest companies. The “Chery QQ” model, once dubbed the “fake Matiz” that mimicked GM Daewoo’s “Matiz,” has garnered attention in the automotive industry. At the 2015 Shanghai Motor Show, the Chinese automaker also introduced a concept car called the EMGRAND, which combines the best features of Kia’s K5 and Renault’s SM5. In addition, China’s Company Z introduced the E200, which mimics the design of the German automaker Smart. These counterfeit vehicles are not just targeting niche markets, but threatening existing automakers with prices that are only one-third of the original models.
In some cases, counterfeiters have become so influential that they have even taken over the original company. Segway is a company whose two-wheeled scooters were popular among Hollywood stars. However, the 15-year-old company was eventually acquired by Ninebot, a knockoff company that filed a patent infringement lawsuit against Segway for copying its product. Segway succumbed to Ninebot’s financial muscle. On the other hand, companies that once succeeded with a copycat strategy can also be stymied by the same strategy. Xiaomi, which quickly became the world’s third-largest smartphone brand, was nicknamed a “copycat Apple” from its inception, appealing to consumers with a “copycat Apple” strategy. Since then, Xiaomi has grown to become the largest smartphone manufacturer in China, with its Mi Power Bank series of smartphone power banks, which are popular for their low price and high performance. However, Xiaomi, which became famous for this strategy, has recently been plagued by counterfeit power banks.
Counterfeiting isn’t just limited to the manufacturing sector, it’s also alive and well in the cultural industry. When the Hallyu craze swept the world, China saw the emergence of so-called “fake Girls’ Generation,” which imitated South Korea’s Girls’ Generation. Many songwriters and singers have also been embroiled in plagiarism controversies. Today, counterfeit products have reached a level of scale and influence that cannot be ignored.
But what separates the real from the fake? The answer is different for everyone. Where do you draw the line between an original creation and a knockoff? The dictionary defines “intellectual property” as “property rights in the products of human mental and creative activity,” i.e., rights granted to works produced through original creative activity. However, according to this definition, even the aforementioned cases of “fake Matisse” and “Ninebot” have differences from the original product. In practice, the standard for judging this is not clear, and courts often make different decisions depending on the circumstances. The lawsuit between Samsung and Apple is a case in point.
So why do people produce and consume counterfeits? Let’s discuss this from a social, psychological, and evolutionary perspective.
Let’s start with the social aspect. Today, we are a society that values ideas more than ever before. In the past, in agricultural or industrial societies, it was all about the process of creating products with the given resources, and the amount of capital and labor was the key to success. Today, however, as the quality of life improves and the share of service and cultural industries grows, the importance of more creative and attention-grabbing idea products is increasing. For example, Apple achieved global success with the novel idea of the iPhone, and director Michael Bay earned $1.087 billion at the box office for his movie Transformers with a unique idea. But coming up with a novel idea isn’t easy. Every day, dozens or even hundreds of ventures are launched with ideas, but most of them fail to realize their dreams and close their doors. Creating is painful, and even if you endure the pain to come up with a novel idea, there’s no guarantee of success. Therefore, using a slightly modified version of an existing successful model is a way to ease the pain of creation and reduce the chance of failure.
What about from a psychological point of view? In the modern world, there are many “replica” products. It’s not uncommon to see women wearing replicas of brands like Chanel or Louis Vuitton. It’s also common to see replicas of expensive international street brands like Supreme and Bape. But what is the psychology of people who use replica products? Do they have feelings of pretense, compulsion, inferiority, etc. deep in their hearts? In modern society, people feel “lonely in a crowd” and live with the anxiety of being separated from others at any moment. This is especially true in South Korea, which has the highest suicide rate and lowest happiness rate among OECD countries. This is why even celebrities with glamorous lives have high suicide rates. Many people suffer from loneliness, unable to close the distance between their true selves and their masks. At some point, the need to look good to others leads them to put on a mask, which in turn leads to the use of replica products.
Finally, let’s think about it from an evolutionary perspective. Charles Darwin introduced the concept of natural selection in his 1859 book ‘ On the Origin of Species. Natural selection is the theory that suitable individuals are selected through interaction with the environment, resulting in genetic changes. However, there is something stronger than natural selection: sexual selection. Sexual selection favors traits that are advantageous in mating competition. A peacock’s large wings make it harder to fly and more visible to predators, but males will accept these inconveniences in order to pass on their good genes to females. The consumption of knockoffs in modern society can also be interpreted from an evolutionary perspective. Humans, as mammals, are also subject to sexual selection, and modern humans recognize appearance and brand as important competitive factors. This leads to the consumption of counterfeit products.