Buy counterfeits at your own peril

Distinction marks between substandard and original Nokia phones.

A scan through Mr Daniel Kalanja’s house tells of how the Chinese influence has grown in the last decade; taking over living rooms, bedrooms, kitchens among others.

His office desk is a mirror image that further confirms the Chinese conquest of Africa’s business space.

However, notwithstanding the increasing trade volumes, consumers have increasingly become incensed with Chinese products claiming forgery and a lack of durability.

A survey conducted by global audit firm PwC recently revealed that consumers buy counterfeits deliberately because they sometimes tend to be cheaper than the genuine ones. Their cheap quotations in a way entice consumers’ purchasing decisions.

According to statistics, about 50 per cent of goods that enter Uganda are either fake or substandard; however, recent revelations indicate that Ugandan importers demand for such kinds of goods because they are cheaper.

Experience shows that though these goods are purchased cheaply, they tend to become expensive in the long run because they breakdown easily and soon require repair or replacement.

A counterfeit electric power extension bought at Shs15,000 has the potential to cause a loss worth millions. It can cause a burnout of all appliances connected to such a gadget.

It is estimated that counterfeits kill at least 100,000 people annually, mostly in the developing world.

Many buildings have collapsed in Kampala city of late and the calamities have been attributed to fake cement, which costs about Shs2,000 less than genuine cement.
Of recent, Chinese manufactured phones have hit the market with names closer to those of genuine brands like Nokla instead of Nokia. These phones look fancier, have double line provisions and they come cheaper than the genuine Nokia.

Mr Kenneth Oyolla, the general manager for Nokia’s business operations in the East and Southern Africa region, recently told Business Power that up to 6 per cent of the value of big phone brands worldwide, is counterfeited.

He said Nokia loses about 10 per cent of the value in counterfeits.

“The situation in Uganda is a bit worrying, and the rate seems to be high. Counterfeiting is threatening our integrity and good name. The Nokia brand is associated with quality and reliability, but we usually get complaints from consumers who are cheated by phone users,” he said.

A duplicated designer bag for example, Gucci, which is spelt Guci in the counterfeit world, goes for Shs45,000 in down town Kampala, while genuine bags cost Shs85,000 to Shs1 million depending on the brand.

The beauty with spending this kind of money on a genuine bag is that you will carry the bag for even as long as 10 years unlike the fake bags that require one to keep on buying a new bag year after year because they get worn out quickly.

Mr Lawrence Kinyanjui, Microsoft East and Southern Africa anti-piracy conversion manager, recently told Business Power that the software industry loses about $2.8 billion (about Shs6.3 trillion) in unauthorised use, reproduction and installation of software programmes in Africa and Middle East annually.

“For every dollar a rightful owner makes, a person selling an illegal version makes $6 or more,” he noted.

Counterfeit medicine accounts for $200 billion (Shs468 trillion), $50 billion (Shs117 trillion) in counterfeit cigarettes while pirated videos are worth $60 billion (Shs140 trillion) world-wide.

Counterfeiting and piracy frustrate people’s creative efforts, lower countries’ incentives to innovate, threaten existence of some companies and deprive national economies of vital tax revenue that would have translated into economic growth.
Illegal reproduction and sale of goods and services also exposes legitimate businesses to unfavourable competition with pirates, encourages criminal organisations, erodes respect for intellectual property rights and threatens the health and safety of consumers.

Counterfeiting also costs the government money in taxes through influx of illegally-imported counterfeit products, denying the country significant economic benefits as fake goods are always imported without import duties or VAT paid.
Recently, Mr Zou Xiaoming, a trade expert at the Chinese Embassy was quoted by this newspaper saying that most importers especially from Uganda ask Chinese manufacturers for low quality goods, which they go on to label as super brands known in world business circles.

He says: “When such goods get onto the market, they are sold expensively by unscrupulous importers only for consumers to realise that they were sold fake goods after a few days of usage.”