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No more fakes, say Indonesian Gen Z consumers

Seth Hays

Chief representative at the International Trademark Association (INTA)’s Asia-Pacific office

Singapore  /  Mon, June 17, 2019  /  12:51 pm
No more fakes, say Indonesian Gen Z consumers

Wakai footwear and the Bali Police destroyed 600 counterfeit goods in May, confiscated from outlets in Bali. (Metroxgroup/-)

According to a study published last month by the International Trademark Association, “Gen Z Insights: Brands and Counterfeit Products,” 72 percent of young Indonesian consumers expect to purchase fewer counterfeit goods in the future. These Gen Z consumers, aged 18 to 23, are notable for their individuality, morality and flexibility.

Their willingness to change comes as welcome news—given that the study also indicates that 87 percent of Indonesian Gen Zers have purchased fake goods in the past year. One of the main drivers: it’s easier to find fake goods than authentic goods, they say.

At the same time, 96 percent of participants in the study agreed that respect for people’s ideas and creations is important.

The study points to an interesting contradiction: young Indonesians respect innovation and creativity, but at the same time violate other people’s intellectual property (IP) by purchasing counterfeit products.

With the right mix of policies and education, the ease with which counterfeits are available could be reduced, and young consumers can protect themselves and support innovation in Indonesia.

Double down on promotion of innovation

Indonesia’s Creative Economy Agency (Bekraf) has been promoting Indonesia’s creative culture and innovation potential since the agency’s establishment in 2015. Bekraf should continue working to promote Indonesian brands, and their creators, and facilitate a future marketplace that is free of counterfeits and safe for consumers.

According to Gen Z Insights, young Indonesians say the most reliable sources to learn about counterfeits are brand creators and employees, followed by media and social media influencers. Hearing directly from those affected by illicit trade, and making sure that respect for IP is part of the innovation process should not be overlooked.

Agencies like Bekraf or the Intellectual Property Office can play a role in promoting these voices.

Read also: Millennials and Gen Z are increasingly pessimistic about their lives, survey finds

Make cross-border supply chains safer and more secure

Many fake goods come from overseas, including dangerous counterfeit pharmaceuticals, which account for up to perhaps 25 percent of the country’s US$2 billion pharmaceutical markets, according to the Indonesia Anti-Counterfeiting Society.

Recent amendments to Indonesia’s customs laws have been helping some brands prevent the importation of counterfeits. For example, recently Indonesia enacted a customs trademark recordal system, whereby brands can file their trademark registration with customs and provide vital information to help officials at the border prevent counterfeit trade.

While these provisions have been helpful, requirements that the brands filing their trademark registrations with customs must have local enterprises effectively excludes many smaller overseas brands from playing a part in the cleanup.

Free Trade Zones (FTZs), while certainly helpful to reduce red tape and speed up business, contribute significantly to the manufacture and trade of fakes in Indonesia. Sometimes fake components are imported—for example, from Singapore to the island of Batam, in Indonesia—processed in Indonesia, then either shipped back overseas and into the global supply chain, or leaked into the Indonesian market. Tighter provisions to prevent transshipment of counterfeits and better oversight to prevent IP violations within FTZs is needed.   

Prevent the sale of counterfeits—especially online

Finally, young Indonesians are well-known for being internet savvy and are the country’s largest online consumers. But unlike in physical markets, spotting a fake online can be more challenging, as clever counterfeiters trick consumers through the use of easily copied photos of authentic goods and clever use of domain names that give the impression of being authorized sellers of a brand.

The police should prioritize and coordinate with government task forces dedicated to cybercrime to build awareness within the government about the importance of tracking online IP crimes, such as the sale of fake goods. After taking down these websites and online stores, the police should secure arrests for any criminal violations and prosecutors should take the cases to the court.

Bringing these cases into the public eye can help reduce the demand for counterfeits, suggests the Gen Z Insights study. In Indonesia, those who do buy counterfeits say they would change their behavior if a fake product is dangerous or bad for their health (75 percent), if money spent on the products supports organized crime (75 percent) and if purchasing fake products means they have to pay a fine (75 percent).

The future is authentic

Indonesia’s multicultural society, spanning the world’s largest archipelago, is bursting with creativity born from a tradition of indigenous cultural expression, trade and exploration. Gen Zers recognize the value of appropriate purchasing choices: supporting creators, innovators and protecting themselves and loved ones from dangerous counterfeits. Now, it’s a matter of acting on this. With the right support, they can fulfill this vision—and make Indonesia’s marketplace an authentic one. (kes)

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The author, based in Singapore, is the chief representative, Asia-Pacific, for the International Trademark Association.

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.