Fake brands that closely resemble popular FMCG brands like Dairy Milk, Life Buoy, and Fair & Lovely are common in rural Indian markets. These fake brands fall into two categories: counterfeits that use identical packaging/graphics/names, and pass-offs that use similar sounding names or packaging. Fake brands are more prevalent in rural areas due to lack of awareness and distribution challenges for real brands. FMCG companies lose an estimated 30% of rural business and 2500 crores annually to fake brands, damaging their brand image and loyalty. Companies are trying strategies like special packaging, informant networks, and consumer awareness to curb fake brands in rural India.

1. Fake brand in rural market
Daily Milk, Life body soap and Fair & Lonely. These are popular brands in the
hinterlands of India. Don’t they sound familiar to daily brands Dairy Milk, Life Buoy
& Fair & Lovely? Well, they not only sound but also look similar to the original brands.
These brands are created by manufacturers producing cheap versions of the original
brands.
Fake brands are identified under two broad categories, namely:
Counterfeit products: These are fake products that bear identical name of product/
packaging/graphics/colour scheme and even same name and address as the genuine
manufacturer. They look exactly like real products other than the legal owner of the real
products & trademarks.
Few known examples: ‘Ponds’ talcum powder; ‘Clinic Plus’ shampoo
Pass-Off products: Such products have a similar sounding name or have a similar
spelling with similar looking packaging and design. These products are meant to mislead
the consumers who are illiterate or in a hurry to purchase goods.
Few known examples: ‘LUK’ for ‘LUX’; ‘Head & Shower’ for ‘Head & Shoulders’
Fake brands exist in rural as well as urban locations. But the problem is more acute in
rural areas especially the deep pockets which are less accessible and people have very
little knowledge about the original brands. “Most people in rural India can recognize
alphabets but not complete words, so during a research, we found a whole lot of samples
of fake Clinic Plus shampoo sachets where the visual was similar to the original brand
but the name was changed to ‘Clinton’ as Bill Clinton was to arrive soon in the country.
During another such raid, we collected about 99 variants of Fair&Lovely cream
including Fair&Lonely, Far & Lovely etc.”, said Mr. Pradeep Kashyap, president, Rural
Marketing Association of India (RMAI) and CEO, MART while sharing an interesting
incident in past.
The Indian rural landscape being scattered in smaller villages, gaining access in all of
them is a tedious task for brands. Also, most of the FMCG brands have not been able to
set up an efficient distribution network in such areas. The local entrepreneurs are well
aware of these challenges. Hence, take advantage by manufacturing cheap substitutes of
original brands, misleading the rural consumers. These manufacturers have an
advantage of being local and thus reach the shops before the original brands do.
Such counterfeits piggy back on huge marketing budgets of FMCG companies. The
rural consumers are aware of the brand owing to ads broadcasted on radio & television
channels. But on time of purchase, the consumers tend to pick their fake counterparts
due to unavailability of original product or get fooled by the retailers who on purpose
sell cheap products for higher margins.
Over the time the share of fake products in the FMCG market has grown to 10- 15%
causing a deep hole in the pockets of the FMCG companies. A study conducted by AC
Nielson, a research agency reveals that FMCG industry loses around 2500 crores
annually to counterfeits and pass-off products. In another recent survey conducted by
AC Nielson reveals that top brands in India are estimated to lose up to 30 percent of
their business to fake products. Besides the loss of revenue, the leading companies also
bear the damage to brand image and brand loyalty of consumers.

2. On a whole, the brands not only suffer in terms of revenue but also have to compromise
on the brand image which in no case can be tolerable. Therefore, various brands have
come up with unique strategies to overcome their shortcomings in the rural markets and
curb the growth of fake brands in rural areas.
Companies like Coca-Cola have set up an elaborate system to curb the menace
of duplicate manufacturers, offering incentives to informers. It has 48 consumer
response coordinators across the countries who work with their teams and redress
consumer complaints directly, including overcharging and spurious bottling. Besides, it
has a large network of route salesmen who have a one-to-one relationship with the
retailers on their beat and keep their ears to the ground. When they spot suspicious
activity, they inform company officials. So though it is impossible to stop counterfeiters
totally, it is possible to minimize the damage they cause.
Upgrading the product packaging periodically or launch product variants so that the
manufacturers of counterfeits find it difficult to copy their products. Hindustan Lever
has initiated special tamper-proof packs for its deodorant spray ‘AXE’, whose nozzle
can’t be detached from the body while Procter and Gamble uses special labels for its
Vicks Vapo Rub which does not peel off even if soaked overnight in water. This makes
it difficult for spurious goods makers to imitate.
Stopping the counterfeits market is a long process but it’s more important for companies
to create awareness among the consumers about the ill effects about such fake products
and the hazards they pose.