Counterfeits – We Are Shooting Ourselves in the Foot [opinion]

A disturbing trend is prominent among our businessmen. This is the use of counterfeit goods.

Counterfeit goods are any product that is passed off as another in order to increase sales for the trader without incurring the real costs, in a bid to ensure higher profit margins. Counterfeit goods, while they may not be substandard, still serve as a deception of the customer and compromise the long-term relationship on which a durable business is built.

We at Uganda National Chamber of Commerce and Industry (UNCCI) are aware of the prevailing hard economic times. But the temptation to cut corners to stay afloat, thus getting sucked into passing off counterfeits, is harmful to our businesses on very many levels. As mentioned above, it compromises the prized relationship with our clients.

In business, nothing happens until a sale is made, but even more importantly, it is cheaper to sustain a repeat customer than initiate a new one. So, it only makes sense that while we chase new customers, we keep the old ones satisfied. In fact, you can do all the marketing and aertising you want but your best and most effective champions are your satisfied customers.

Anything that creates dissatisfaction among your clients can be the beginning of the end of your business.

Secondly and related to the above is the fact that one cannot really vouch for the quality of one’s goods if they are counterfeits. An electrical plug purportedly made in Germany and is expected to last for months, even years, may or may not do so. This uncertainty passes on to your business, with customers catching on very fast.

This would be particularly injurious to your business if the goods also constitute a health or safety risk to your clients. The coincidence of these two further weakens the ability of the Ugandan businessman to hold his own in our ever competitive market.

With the opening of our markets to imports and foreign retail chains, not only does the buying public get a better appreciation of what constitutes quality, but our local suppliers may come up short against the exacting standards of these chains, who will not tolerate fake products. In effect, by employing counterfeits, there may be a short-term benefit but in the long run, we are actually shooting ourselves in the foot, in terms of lost market share.

Even worse is that while the purveyors of these counterfeits may be a few rotten apples, the public bunches all Ugandan businessmen as counterfeit-pushers. This is dangerous not only for the individual businessmen but for the economy as a whole. If our own businessmen fail because customers reject them, businesses close, jobs are lost and taxes are forgone.

And at a more personal level, the spillover to family and communities in terms of welfare improvements and philanthropy are lost. So, the issue of counterfeits in our market is not the problem of a few errant businessmen or their unfortunate clients, or even a law enforcement issue for government, but a problem for all of us.

For starters, we need to strengthen the law against counterfeit products. Uganda National Bureau of Standards’ scope needs to be widened beyond just gauging the quality of goods. As it is now, as long as goods pass the approved standards, it does not matter whether they are fake or not.

Secondly, our businessmen need to stick to the moral high ground, keep their eyes glued onto the long term and big picture and not be tempted by the quick profit that counterfeiters promise. As businessmen, we need to return to the basics, that we are here to serve the client. We need to know that sustainable profit is a byproduct of that enduring relationship that will ensure we stay in business through good and bad times.

At UNCCI, we need no convincing to fight against this ill that threatens our members’ livelihoods as well as the public’s safety and health. In addition to education drives, we are willing to stand shoulder to shoulder with government to stamp out this ill. This is a sufficiently pressing issue that we are willing to commit all our resources to fight.

The author is the president of theUganda National Chamber of Commerce and Industry (UNCCI).

Source : The Observer

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