New Multi-Country Study Explores Gen Z Purchase Behaviors, Moral Compass: China Marks One of Few Countries to Hold Morals above Income When Considering Fake vs. Real 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 China. The study uniquely explores through a moral versus practical lens what drives Gen Z’s decisions to purchase real or counterfeit 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. China is one of the few countries where morals beat income—by five percent—as the key influences on their opinions about fakes.
In contrast, globally, while 48 percent of all respondents “don’t think it’s okay or it’s totally not okay” to purchase fakes, income outpaced morals by 10 percent.
“Gen Zers often apply a lens of situational morality to their purchase decisions, and practical considerations can overtake moral ideals,” the study found.
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 China, 94 percent of Gen Zers say it is important to always be true to who they are; 85 percent determine their own moral code; and 89 percent believe brands should aim to do good in the world. In addition, brand name is more important in China than in other countries—73 percent versus a 62 percent global average, while 78 percent feel that a brand name is not as important as how the product fits their needs.
The study found that 97 percent of Gen Zers in China have a strong respect for the value of people’s ideas and creations; and 80 percent think it’s important to buy genuine products, compared with a 74 percent global average.
Also of note, China ranks as the having the largest percentage of Gen Zers with at least some knowledge of intellectual property rights—99 percent, versus a global average of 85 percent.
Yet, in the year prior to the survey, 84 percent of Gen Zers surveyed bought counterfeit goods, more than the 79 percent global average. Driven by price and accessibility, they cite ease in finding counterfeits (61%), a positive purchasing experience (60%), and only being able to afford the fake version of some brands (54%). In addition, 56 percent feel they cannot afford their desired lifestyle.
Providing additional insight about the proliferation of counterfeiting, 83 percent believe that fake products are sold “everywhere.” Among sectors, apparel, and shoes and accessories lead the most commonly purchased counterfeits.
Positively, in China, 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 the next few years, the pendulum may swing toward genuine goods. In China, despite the high percentage of counterfeits purchased by Gen Zers, 89 percent of respondents recognize fake goods as unsafe, and 86 percent feel the sale of fakes tarnishes a genuine brand’s reputation. Other drivers away from counterfeits include proceeds supporting organized crime, and an adverse impact on the environment.
According to the study, 70 percent of Gen Zers in China expect to purchase fewer counterfeit products in the future; this compares to 52 percent globally and is surpassed only by Nigeria (87%) and Indonesia (72%). Prompting this is their desire for better quality things (68%), recognition that buying real goods is “the mature thing to do” (47%), and the ability to afford the genuine product (43%).
“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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