New Multi-Country Study Explores Gen Z Purchase Behaviors and Moral Compass: Indonesians Put Income above Morals in Weighing Real vs. Counterfeit Goods
Published: May 16, 2019
New York, New York—May 16, 2019—The International Trademark Association (INTA) today released a comprehensive research study that takes a deep dive into the behavior of Gen Z—the largest group of consumers worldwide by 2020—when it comes to their relationship with brands and their attitudes toward counterfeit products in 10 countries, including Indonesia. The study uniquely explores through a moral versus practical lens what drives Gen Z’s decisions to purchase real or fake goods, and offers brand owners a roadmap to communicating with these 18 to 23 year olds.
Among the major findings of the study, titled “Gen Z Insights: Brands and Counterfeit Products,” the top two factors influencing opinions about fake products are morals and income. In Indonesia, income beats morals by 14 percent, slightly more than the global average of 10 percent.
“Gen Zers often apply a lens of situational morality to their purchase decisions, and practical considerations can overtake moral ideals,” the study said.
Moreover, Indonesia ranks as having the fourth highest percentage of Gen Zers who have purchased counterfeit products in the year prior to the study—at 87 percent of respondents, compared with a global average of 79 percent. The good news is that change may be on the horizon, according to the findings.
The study of the Gen Z psyche is set against two powerful global backdrops. The first is the emergence of Gen Z as the largest demographic group, making it critical for brand owners to understand them. The second is the proliferation of counterfeiting, with the international trade in counterfeit and pirated products, including digital piracy, estimated to skyrocket to as high as $2.81 trillion by 2022, according to a study published in 2017 by INTA and the International Chamber of Commerce-BASCAP.
INTA focused the Gen Z Insights study on individuals born between 1995 and 2000. The research consisted of qualitative virtual discussions with 30 Gen Zers from four countries in August and September of 2018, followed by a quantitative online survey in November 2018 of 4,500+ Gen Zers from 10 countries: Argentina, China, India, Indonesia, Italy, Japan, Mexico, Nigeria, Russia, and the United States. Multiple factors went into selecting these countries, including the Gen Z population, prevalence of counterfeit goods, and level of economic development.
The research identified three major characteristics and attitudes of Gen Z toward brands and counterfeit products: individuality, morality, and flexibility.
In Indonesia, 93 percent of Gen Zers say it is important to always be true to who they are, and 88 percent determine their own moral code. On their attitudes toward brands, 90 percent believe brands should aim to do good in the world, and 73 percent believe a brand name is not as important as how the product fits their needs.
The study also found that 96 percent of Gen Zers have a lot of respect for people’s ideas and creations; and 78 percent of Gen Zers have at least some knowledge of intellectual property rights, falling short of the global average of 85 percent.
Across all countries, “functional benefits like price and accessibility come to the forefront as reasons Gen Zers buy fake products,” according to the study. In Indonesia, while 83 percent of respondents think it’s important to buy genuine products, the top functional benefits are: 73 percent say fake products are easier/more convenient to find than genuine products, 66 percent note the money benefits the seller who is making a living for him/herself, and 53 percent say “no one is able to tell if I use fake products.” In addition, 53 percent feel they cannot afford the lifestyle they want.
Positively, in Indonesia, 95 percent of those surveyed expressed openness to change their views based on new things they learn.
“The door is open to change the mindset and buying habits of this significant group of consumers. The Gen Z Insights study alerts brand owners that they need to pay attention and adapt marketing strategies,” said INTA President David Lossignol, Head of Trademarks, Domain Names and Copyrights at Novartis Pharma AG in Switzerland.
“It’s incumbent on all of us to jump on that opportunity through education. We need to drive home the message that not only are counterfeit products dangerous, they are also socially unacceptable,” he emphasized.
In response to the findings, and as part of its call for more extensive education, INTA announced that it is expanding the reach of its Unreal Campaign—which informs young consumers worldwide about the value of trademarks and brands and the dangers of counterfeit products—from 14 to 18 year olds, to 23 year olds. The campaign includes educational presentations at schools—in 38 countries so far—and social media messaging.
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%), if money spent on the products supports organized crime (75%), and if purchasing fake products means they have to pay a fine (75%).
Looking to the future, 72 percent of Indonesian Gen Zers expect to buy fewer counterfeit products —marking the second highest percentage of consumers with that belief across the 10 countries. Prompting this is their desire for better quality things (74%), the ability to afford genuine products (35%), and their recognition that buying real goods is “the mature thing to do” (29%).
“The fact that Gen Zers see their identity as a ‘work-in-progress’ is a good thing in the fight against counterfeiting,” Mr. Lossignol said. “As Gen Zers get older, maturity, affordability, a desire for quality, and a greater awareness of counterfeits’ adverse impact on society may kick in and put a different spin on their purchasing behavior.”
INTA commissioned Insight Strategy Group, LLC, a market research firm based in New York, to conduct the study. The complete study and country-specific reports are available at www.inta.org/impactstudies.
About the International Trademark Association (INTA)
The International Trademark Association (INTA) is a global association of brand owners and professionals dedicated to supporting trademarks and related intellectual property (IP) to foster consumer trust, economic growth, and innovation. Members include more than 7,200 trademark owners, professionals, and academics from 191 countries, who benefit from the Association’s global trademark resources, policy development, education and training, and international network. Founded in 1878, INTA is headquartered in New York City, with offices in Brussels, Santiago, Shanghai, Singapore, and Washington, D.C., and representatives in Geneva and New Delhi. For more information, please visit www.inta.org.
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