Gez Z counterfeit productsA Global View of Gen Z and Counterfeit Products

Born between 1995 and 2010, Gen Zers are digital natives who will soon comprise the largest consumer group globally. Given their growing impact, it’s critical for brand professionals to understand the relationship between Gen Z and brands. This includes Gen Zers’ attitudes towards counterfeit products and the factors that influence their purchases of those goods. To get a better sense of these dynamics, the International Trademark Association contracted ISG to study Gen Zers between 18 and 23 years of age in ten countries: Argentina, China, India, Indonesia, Italy, Japan, Mexico, Nigeria, Russia, and the United States (see the full report here). The findings we discuss below are from this study.

*The ten countries studied were selected based on factors such as the population size of Gen Z, the prevalence of counterfeit goods, and the level of economic development.


Who Are Gen Zers?

Like all generational groups, there are certain characteristics that stand out about Gen Z. In particular, Gen Z’s generational identity is defined by three characteristics:

  • Individuality: Staying true to oneself. As a generation, Gen Z has a strong sense of self, which generally holds true across cultures and markets.
  • Morality: Doing what’s right. Gen Zers aspire to maintain a strong moral code, which is both internally driven and a product of their upbringing.
  • Flexibility: Being open-minded. They see their identity as an evolving “work-in-progress” and are figuring out who they are as adults.

Info graphic of Gen Z generational identity, morality, flexibility

These values influence how Gen Z engages with brands. Brands serve as an extension and a reflection of Gen Zers’ individual identities. For most Gen Zers, how a brand’s products fit their needs matters more than brand names themselves. 62% say the brand name is somewhat important or very important with some differences by market, but 81% feel that the brand name isn’t as important as how the product fits their needs. Gen Zers expect brands to align with and reinforce their own morals and values.


Counterfeiting and Conscience

So what does that mean when it comes to counterfeit products? It’s a case of “situational morality.” Overall, Gen Z has a working knowledge of intellectual property (IP) rights, and those with this awareness see IP rights as equally important as physical property rights. 70% say that intellectual property rights are equally as important as physical property rights. Yet 86% also think that brands should be accessible to all.

When principle meets practice, things get a bit complicated. In principle, Gen Z has strong respect (93%) for the value of people’s ideas and creations, and this ideal extends into the brand space. And 73% think it’s important to buy genuine products. In practice, however, Gen Zers live in a world where the sale of counterfeit products is ubiquitous. So it’s not just a theoretical issue. Their ideals are tested by the reality of their surroundings. When it comes to counterfeits, Gen Zers experience an internal conflict between their values and their practical considerations.


Morals Versus Money

Info graphic comparing Gen Z morals versus money

You might say it comes down to a battle between morals and money. When asked to name the influences that shape their opinions about counterfeits, 37% say morals and 47% say income. Income clearly wins. While many Gen Zers are morally opposed to purchasing counterfeit products on principle, they also see the act as morally ambiguous.

“I have a liberal worldview in that sense — if you think it’s ok to buy non-original sneakers, you are free to do so. I am not going to judge you.” —Male, 19

Gen Zers often apply a lens of situational morality to their purchase decisions, and practical considerations can overtake moral ideals. Using situational morality (where ethics can vary based on context), Gen Zers are able to rationalize the purchase of fake products, despite its dissonance with their ideal moral code. In these instances, they apply a flexible sensibility towards their moral standards.


Counterfeit Consumption

So, how often do Gen Zers purchase counterfeits? Within the past year, 79% of Gen Zers report purchasing fake products from a counterfeit industry — primarily apparel, shoes, and accessories. Functional benefits like price and accessibility are the primary reasons cited for buying fake products:

  • 58% say that fake products are easier to find than genuine products
  • 57% say they can only afford the fake versions of some brands
  • 57% think that their money is benefitting the seller who’s making a living

Gen Z’s top barriers to purchasing fake products are related to quality and safety concerns:

  • 81% say that fake products are unsafe
  • 77% say the quality of fake products is usually not good enough

These quality and safety concerns may be why counterfeits in the beauty and consumer electronics categories are purchased less frequently.


Is There a Way to Counter Counterfeits?

In addition to quality concerns, Gen Z’s appreciation for others’ hard work and ingenuity is a top-of-mind barrier to purchase. They respect the authentic sources and creators of products and brands. Yet, as we’ve seen, these feelings can be superseded by circumstance and situational needs. There’s also a life-stage factor in play. While Gen Zers may currently purchase fake products because of a variety of practical reasons, a majority aspire to purchase fewer fakes in the future. In the meantime, Gen Zers are also open to input and advice about brands and counterfeits from respected sources. In particular, brand and media personalities serve as strong candidates for delivering these messages and building trust among Gen Zers:

  • 55% cite brands’ creators or employees
  • 45% say media personalities
  • 40% reference social media influencers

So when seeking to counter the impacts of counterfeiting, especially among Gen Zers, there are two primary factors for brand managers to consider: the underlying beliefs driving purchasing behavior and the sources that young consumers are willing to listen to when deciding how and what they buy.


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