Exercise caution while buying consumer products offered at discounted prices. For, the Indian markets seem to be flooded with counterfeit fast moving consumer goods (FMCG), a study shows. Though the problem was always there, the menace has been on the rise despite the efforts made by FMCG companies.
A recent study has showed that the sales of fake consumer goods are "growing faster than the overall consumer products market". Counterfeit and smuggled products now occupy more than a fifth of the overall sales in the country's FMCG sector, the Business Standard reported citing the study.
The estimation is based on the study conducted by consultancy firm KPMG and the Federation of Indian Chambers of Commerce and Industry (Ficci), which showed that the FMCG counterfeit market accounted for 65% of the total market in 2014.
The FMCG counterfeit market was estimated to be worth Rs 68,000 crore last year. Industry estimates now show that the fake FMCG products' sales would have increased this year.
The overall FMCG market in the country was projected to be worth Rs 3.2 lakh crore in 2014. So far this year, the market has not shown any sharp growth due to a fall in consumer spending, mainly in urban areas.
Rajat Wahi, partner and head (consumer markets), KPMG India, forecasts the market to grow by 11-12% annually over the next four years. However, the counterfeit market is expected to witness a higher growth this year, with law enforcement remaining poor and "fraudsters look to make inroads into the market, riding on cheap products".
"In a megapolis such as Mumbai, cases of counterfeiting reported are negligible," says D Sivanandan, former director general of police, Maharashtra, who owns an advisory firm on counterfeiting.
"I cannot imagine what the situation is like in small towns and cities, where monitoring levels are lower," he says.
Major companies in the FMCG sector are currently working closely with law enforcement authorities to check the spreading counterfeit market. Hindustan Unilever, Godrej Consumer, Dabur and Emami said that they often engage "with the police and government to conduct raids and seizures".
"Counterfeiting is something we take very seriously, since any pass-off or fake of our product is a loss of business for us," says Sunil Duggal, chief executive officer, Dabur India.
Various fake products of Dabur, including Gulabari, Lal Dant Manjan and Amla Hair Oil were sold in the market in the past.