Thursday, December 17, 2009

Handbag Mania

For people in the know there’s a code phrase in Manhattan’s China Town, “Gucci, Prada, Coach.” Whispered on the streets, these three little words act like a magic spell that transforms the neighbourhood into a Handbag Heaven. Chinese women, like pied pipers, lead streams of bewitched shoppers into secret locations found in various places, some through navigating the basements of buildings, some hidden as closets at the back-end of storefronts, and sometimes even in the backs of a vans. In broken English, the women rush shoppers inside these dark rooms, the doors locked shut and finally, after a moment the lights are switched on to reveal walls filled with designer handbags – some fake, some real – at an affordable $35+ price (approx. R300). It seems like such a good deal that after just one experience you might be hooked. On a recent trip to New York my best friend transformed before my eyes into a once-off fake bag “dealer,” buying multiple bags to fill orders for friends around the country.

Under normal circumstances any modern woman would tell you it would be risky to follow strangers into unknown locations and unthinkable to pile into the back of a van. No rational person would willingly be locked inside a dark room in a place unknown to them, especially not in dodgy China Town. The risk seems higher when you consider that most of the shoppers are tourists on holiday in New York and do not know the general environment well. Nonetheless the prospect of scoring a designer handbag – even a counterfeit one – seems to wash all these worries away. The experience brings an undeniable rush of adrenalin to fashion lovers, afterall you’re getting an amazing bag at the fraction of the price – you’re getting away with it!

Sometimes known as “Counterfeit Alley,” Manhattan’s China Town has had an on-again / off-again love affair with the faux-bag industry. In 2004, 17 men were arrested in a sting operation when smugglers offered to pay $1-million to undercover agents posing as corrupt customs officials in an effort to ensure clearance to shipments of containers full of knock-off bags manufactured in China. The trade seemed to retreat for a while and the level of secrecy about it increased but lately business has picked up and to anyone looking, it’s not too hard to see what’s going on. Perhaps the levels of vigilance were relaxed too much – just this month the NYC Police Department launched a crack-down campaign after a long undercover investigation, seizing $1-million worth of counterfeit handbags and watches, and closing down 30 business stalls. In part, these legal actions have undoubtedly been propelled through pressure from the legitimate designer industry which is an important tax-paying stakeholder to cities around the globe, and which has a lot at risk if their interests are not protected. Louis Vuitton handbags are among the most popular fakes in the world, and the company has put significant funding and legal support in place to aggressively protect its interests. In 2004 the company had already employed a 60-person dedicated anti-counterfeiting team and achieved 1,000 arrests. Currently the team is still hard at work unfortunately demonstrating the persistence of the problem. Even under this level of scrutiny the trade has never been eliminated, perhaps due to the enormous demand among consumers.

In the US, selling counterfeit handbags is illegal, but buying isn’t. Research shows that even the wealthy, who are just as likely to buy the genuine article, purchase these goods. The phenomenon is so great that ladies who live in some of America’s nicest neighbourhoods push Avon and Tupperware aside in favour of hosting a Purse Party in their homes. These facts are worrying to the luxury design-houses since they suggest that counterfeit goods now have the potential to steal real market share and do greater damage than previously thought.

Beyond the impact on sales, industry advocates propose that there is some evidence that the counterfeit handbag business – just like other industries in the underground economy – supports other illegal activity and causes negative social effects, like human rights abuses within the manufacturing sector against child labourers and the proliferation of unsafe working conditions. It has also been identified as a funding mechanism for crime rings and even terrorism. Others argue against the design industry however, and propose that the prices for legitimate goods are inflated far beyond their fair value especially in places like South Africa where the price for goods can easily be in the thousands of Rands, making the a legitimate items far outside the reach for most.

The debate around these fake bags covers complex and wide-ranging issues and certainly leaves us with a lot to think about. Some will be motivated to purchase a fake bag because it’s inspired by high fashion but is available at an affordable price. Others will look at the decision not-to-buy as a way to do something positive for the world. Whichever way you look at it, only one thing is certain – the counterfeit handbag industry is tenacious and doesn’t seem to be going anywhere soon, so we’ll have plenty of time to consider whether or not to “fake it.”

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