Agreement between Vietnam and LVMH against counterfeit
The existence of the luxury industry reflects not only the global economy but also the motivation of middle-income customers to pursue higher quality lifestyles. Today, however, people are getting obsessed with “name value,” and the value of the product doesn’t seem to matter as much as it used to. In Vietnam, fake goods are publicly available on the shelves at high-end shopping malls and street shops across the country. The growing taste among local consumers for trendy designs, while feeling reluctant to spend large amounts of money, has caused them to buy fake products ranging from eyewear and shoes to garments and handbags; their desire for cheap luxury has resulted in the market’s development in the country.
The first international fashion brand to prevent the circulation of counterfeit
To protect intellectual property and respect creativity, the Vietnam Directorate of Market Surveillance (DMS) and French luxury goods conglomerate Moet Hennessy Louis Vuitton (LVMH), signed a memorandum of understanding (MoU) on May 7 to put an end to counterfeits and exercise intellectual property rights of the companies represented by LVMH in Vietnam, including Louis Vuitton, Dior, Celine, Loewe and Givenchy.
This isn’t the first time such measures have been taken. Back in 2015, the first cooperation between the authorities and an international brand was made by Louis Vuitton, in signing an MoU with the Hanoi Market Management Bureau in the wake of protecting intellectual property in the country, becoming the first international fashion brand to prevent the circulation of counterfeit products in Vietnam.
The main cause of the knock-off boom in the country
In fact, buyers are totally aware that the products they buy aren’t genuine, but the low prices and trendy style of expensive brands are often the main reasons for them to buy the merchandise. Lack of awareness of intellectual property rights is also the main cause of the knock-off boom in the country. Over the past year, Vietnam’s laws have not imposed fines on people who use counterfeit goods, and due to a lack of enforcement, Vietnam has detected over 44,500 cases related to counterfeiting and piracy since 2014, according to reports.
However, despite a more stringent law on intellectual property, many local businesses are still reluctant to work with the authorities, DMS General Director Tran Huu Linh said at a press conference. He indicated that the signing of an MoU with LVMH will serve as an example of DMS’s cooperation with foreign businesses in combating fake goods and intellectual property infringement in Vietnam.
Counterfeit products can be seen in various industries, ranging from tech products, medical supplies, car parts, toys, food and cosmetics brands and electrical goods, while high-end luxury products have been widely counterfeited because of high profits. The value of the counterfeit market reached $1.2 trillion in 2017, almost $100 billion of which was directly linked to fake branded goods.
Businesses are unable to fight fake goods on their own
Tran indicated that the MoU signed with LVMH marks DMS’s first cooperation with foreign businesses to combat fake goods and IP infringement in Vietnam. Laurent Marcadier, director of Asset and Persons Protection at LVMH, said businesses are unable to fight fake goods on their own. Therefore, strategic cooperation with authorized forces, including DMS, is key to putting an end to counterfeiting products in the country.
Fighting counterfeiting is nothing new for luxury brands. LVMH allocates significant portions of its budget to combat counterfeiting. However, according to VN Express, many counterfeit products are imported into the local market in the form of spare parts rather than finished products, making it almost impossible for authorities to curb them. With the signing of the MoU, both parties will also work closely to target individuals and organizations that manufacture, store, sell, circulate or advertise goods bearing counterfeit trademarks and goods infringing intellectual property rights.