PARIS, July 20 — Counterfeit consumer goods now account for an estimated 2.5% of world trade, a figure that represents a structural challenge to global intellectual property regimes. The OECD, whose economists track this trade, puts the 2019 revenue from counterfeit products at $464 billion. In the same year, up to 5.8% of goods imported into the European Union were counterfeit.
The scale has drawn comparisons to organised crime. A report described counterfeiting as the largest criminal enterprise in the world.
The OECD’s senior economist has noted that the scale is alarming and that any product protected by intellectual property rights is a target. Counterfeit goods span nearly every industry, from designer handbags and watches to consumer electronics and pharmaceuticals. The common denominator is the intention to mislead consumers by closely imitating the appearance of another product, often violating trademarks, patents or copyrights.
Scale of the Problem
The OECD’s data, though from 2019, remains the most comprehensive global benchmark. Sales of counterfeit and pirated goods are projected to reach €1.67 trillion — approximately US$1.89 trillion — by 2030. That would represent a substantial increase from the 2019 revenue figure, driven by the expansion of e-commerce, porous border controls in certain regions, and the difficulty of policing global supply chains.
Colloquial terms such as “dupe” (short for duplicate), “knockoff” or “rep” (replica) have entered everyday language, though their legal meanings differ. A dupe may copy the appearance of a product without using the brand name or logo, sitting in a grey area that makes enforcement trickier.
Sellers of such goods may infringe on intellectual property rights regardless of the terminology used.
China’s Role
While counterfeit goods originate from many economies, China remains the main source. The Counterfeit Report states that China produces 80% of the world’s counterfeits. It adds that the United States buys about 60% to 80% of those products.
The report states that companies spend millions or billions of dollars building brands and reputations that are “being completely destroyed by Chinese counterfeits.” That, it argues, leads to a loss of consumer confidence and the closure of retail stores, creating what it describes as a duopoly of Walmart and Amazon. The concentration of production in China is documented by the OECD as the leading origin economy for counterfeit goods, a pattern that shows no sign of shifting despite periodic crackdowns and trade negotiations.
Health and Safety Risks
Beyond the economic damage, counterfeit goods carry concrete risks. They are typically of lower quality and can pose health and safety dangers. That is most acute in the pharmaceutical sector, where fake medicines can kill, and in consumer electronics, where substandard components can cause fires.
Even in luxury goods, the use of cheap materials and unregulated dyes can cause allergic reactions. The problem is not merely one of brand dilution; it is one of public safety.
For all the focus on intellectual property, the salient point is that counterfeiting is not a victimless crime. It undermines the legal businesses that pay taxes, employ workers, and invest in research and development. The OECD has pointed out that the target set is broad — any product protected by intellectual property rights is at risk — meaning no industry is immune.
Outlook
With projections pointing toward a substantial increase of the fake goods market by 2030, policymakers face a challenge to adapt enforcement mechanisms that have struggled to keep pace with the digital economy. The United States, which buys the majority of the world’s counterfeits, will be a key arena for any meaningful crackdown. Whether the current administration — or any future one — can marshal the diplomatic pressure on Beijing and the customs resources at home to reverse the trend remains an open question.
For now, the counterfeit trade continues its steady expansion, one dupe at a time.
