More people are buying counterfeit electronics on the streets of Hong Kong than online, while shipments of fake goods from the city to the European Union and United States have more than doubled in the past three years, a survey conducted this month has found.
The Intellectual Property Rights Study, a joint report by the European Chamber of Commerce, KPMG, law firm Mayer Brown JSM and market research firm TNS, examined consumer attitudes in Hong Kong and Macau towards purchasing fake goods. The study found that people think it is unethical to buy fake goods, but they do not feel guilty about doing so and 73 per cent of people have done so.
Half of the 800 survey respondents said they had bought fake CDs and DVDs, the most commonly bought copy products. The proportion of people who had bought fake electronics rose to 13 per cent, up from 8 per cent last year. Fake electronics purchases also accounted for significantly bigger expenditure, with one in five people spending HK$1,000 or more in the past year.
Luxury or branded goods were the third most popular type of copy products bought, while few people bought fake toys, clothes or watches. A quarter of respondents said they had downloaded pirated movies and music online in the past year and the same number of people said they intended to continue doing so in the future.
Purchasing fake goods on the street and in shops in Hong Kong is gaining popularity, with 70 per cent of people admitting doing so, up from 58 per cent last year. Mayank Vaid, chairman of the European Brands Protection Council, said that was a worrying sign. At the same time, 5 per cent fewer people bought copy products online than a year ago. Fiona Chan, project director at TNS, said the reason might be that people were afraid of getting caught.
Stefan Amarasinha, head of the trade and economic section of the EU office in Hong Kong and Macau, said Hong Kong was the source of 7.8 per cent of the counterfeit goods seized by the EU last year, with a retail value of €1 billion (HK$10.5 billion), up from 1 per cent in 2006. In the United States, shipments originating from Hong Kong accounted for 33 per cent of seized counterfeit goods last year, up from 11 per cent in 2009.
Statistics from the World Customs Organisation show that mainland China is the biggest exporter of counterfeit goods to the world, but its share has declined from 63 per cent in 2010 to 43 per cent last year. Vaid said while that showed the mainland authorities' efforts to fight counterfeits, the seven-fold rise in Hong Kong's exports could mean the city was being used as a conduit for shipments because of its previously clean reputation. "If you make a shipment from Guangzhou, it is very high-profile," Vaid said, "but if you ship from Hong Kong, it is not."
On the upside, 41 per cent said they would pay for music online if it were made easier to do so in Hong Kong.
The survey also showed legal consequences were considered a deterrent by most respondents, but only half thought there were any. Selling counterfeits is illegal in Hong Kong but buying is not. "Legislation may be the answer," Chan said.
Alan Chiu and Benjamin Choi, partners at Mayer Brown JSM, said that buying counterfeit goods was not penalised in most countries for two key reasons.
First, the primary objective of intellectual property rights protection is to protect the intellectual property owner against unauthorised manufacturers who take unfair advantage, but not against consumers who may buy a counterfeit product by mistake.
Second, unless there are suspicious circumstances such as unreasonably low prices that should make consumers doubt a product's genuineness, it is very difficult to prove whether the buyer knew that he or she was buying a counterfeit.