With India going for demonetization of 85% of its currency, the impact on the counterfeit trade will be an interesting area to watch. In the short term, just like any other illegal trade, the impact of demonetization on the counterfeit trade is expected to be quite large and much more than the impact on the normal businesses. Coupled with demonetization, a continuous shift & emphasis on digital payments and GST rollout is also expected to play a vital role on the counterfeit trade.
But this looks to be a short term phenomenon only; the government expects that within 1 or 2 quarters the business will be back to normal. It is expected that counterfeit trade might come back but may undergo a change. This change will be more technology enabled, more digitized and efficiently managed.
We are likely to see that a change in the way brands manage the counterfeit trade by keeping the anti-counterfeit activities under the wrap, brand owners will be forced to depend more on involving and educating consumers. Particularly, when the tax evasions are expected to come down, it will be imperative for brand owners to educate consumers and involve them for consumer’s own safety. Brand owners at this time of transition, need to focus more on digital & social channel to interact with consumers and trade channels to prolong the positive impact of demonetization on the lower availability of counterfeits in the future.
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