There's no point in selling counterfeits: 'It's a losing business'

The DED is indeed rapidly thwarting the grey market that thrives behind the haven of luxury brands.
The DED is indeed rapidly thwarting the grey market that thrives behind the haven of luxury brands.

Dubai - The sale of fake items has drastically plunged in this market because of the DED's vigilance.



by

Nilanjana Gupta

Published: Mon 17 Jun 2019, 9:00 PM

Last updated: Tue 18 Jun 2019, 12:05 PM

A year after Khaleej Times joined the Department of Economic Development (DED) in a raid on Karama shops, the presence of counterfeit items is at an all-time low, said shop owners.
"My business is running in the red. We get just one or two customers in a day," said Abdul, 40, who owns a shop for ladies' bags and purses at the Karama shopping complex.
"There are days when I don't end up selling even a single item. When I opened this shop two years ago, I used to make about Dh2,000 on some days, but now I only make Dh100," the Malayali expat added.
This is the third time he has opened a shop in Karama, he said. Five years ago, the DED had issued a fine of Dh50,000 on his first shop during a massive crackdown on fake items.
"After paying that hefty fine with great difficulty, I closed down my shop and went back to India for a few years."
The sale of fake items has drastically plunged in this market because of the DED's vigilance. If there were 100 sellers earlier, now there are only five, he said.
Despite the closure of shops, property prices haven't budged, said Abdul, who continues to pay a rent of Dh48,000 for the third year.
"I haven't been able to pay this shop's rent for the last five months. If the situation continues, after another three to four months, I plan to close down this shop, cancel my visa, and go back to India for good."
Talking about fakes, he said: "Many years ago, shop owners used to display fake items on the counters. Now, they are hidden underground or inside secret doors. A few tourists still come here looking for fake items. They don't mind buying a 'copy'."
Ahmed Riaz Abu Bakr has been working at Rashid store for 19 years. But the last eight months have been the "worst" in terms of sales, said the 40-year-old from Kerala.
"Shoppers come but leave without buying anything. Since I have been around for almost two decades here, I do have a few loyal customers who keep coming back," he said. 
Ahmed agreed that the sale of fakes is almost negligible now in the Karama market after repeated raids by the DED.
"The fines are so huge and the sales are so low. It's almost impossible for shop owners to take the risk," he said.
In the video released by Khaleej Times in April 2018, it was established that sellers not only hide fake items inside their shops, they also use apartments to secretly sell them.
Ahmad Almheiri, senior manager of the business protection department at the DED, said: "If they are selling in a secret apartment, it means they know that the DED is always in the market and that it's hard to sell counterfeits in Dubai."
Almheiri explained how a consumer can tell if an item is genuine or fake. "Suppose you're walking in Karama, a person comes to you and tells you 'I have Gucci bags' or some other brand and it's in my secret apartment. By logic, it's counterfeit. If it's genuine, he will sell it in front of the shop, not behind a secret door, not in a secret apartment."
The DED is indeed rapidly thwarting the grey market that thrives behind the haven of luxury brands.
Going by the numbers, last year, nearly 20 million counterfeit items were seized in Dubai. These included handbags, cosmetics, sunglasses, and perfume, which amounted to a market value of Dh332 million. This was considerably less than 26.2 million pieces of counterfeit goods confiscated in 2017, with a net value of Dh1.19 billion.
When Khaleej times captured the Karama raid live
Secret apartments, hidden doors and cleverly concealed shelves - these are some of the ways Dubai's grey market traders use to sell fake goods. However, as Khaleej Times found out last year when we joined the Department of Economic Development (DED) in a live raid of six shops in Karama, Dubai's inspectors are one step ahead of their targets.
It happened on April 5, 2018. The shop owners were perhaps preparing for the weekend rush of fakes. Little did they know, the DED team was also preparing for them.
About 7,000 items - worth approximately half a million dirhams - were seized in a matter of hours. There were fake luxury bags, watches, clothes and sunglasses.
The raid also revealed a new method traders were using to conceal fakes: A secret door to a compartment under the floor tiles.
The video was widely shared by Netizens in the UAE and beyond, amassing more than one million views and 10,000 shares, making it one of our most watched videos last year.
When we visited the Karama market recently to take stock of the sale of fake goods, shop owners vividly described the video that showed how the DED team came down hard on the sellers of counterfeits.
Since then, the awareness among shoppers and shop owners about the sale of fake items and its legal ramifications has increased manifold.
nilanjana@khaleejtimes.com


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