Combating Counterfeits in Rural India

An examination of primary and secondary data on rural consumer behaviour shows that for day to day consumption items people are inclined to spend less, purchase often, buy small packs and tend to get lured by duplicate and cheap but well-labelled products. How do companies face the menace of spurious and duplicate products? Read on
Combating Counterfeits in Rural India

What do you see when you walk through markets and haats in rural India? Multitude of products spread and displayed on cots, ‘thelas’, shanties, stalls and shops that are lit in the evening by LED lamps. Shining stainless steel utensils, plastic buckets, mugs, kitchen and bath utilities; apparel, such as shirts, trousers, blouses, tops, jackets, sweaters, coats, socks, etc. form a formidable wall of hanging mass; cosmetics, soaps, shampoos, hair oils, nail polishes and face mirrors lure the rural women and children; shoes, sandals, ‘chappals’, of all types; electrical items, heaters, bulbs, mixers, grinders share space with other household gadgets; food stalls that display running lengths of packaged snacks and food, and offer a range of beverages; mobile carts that stock fruits and vegetables; interspersed with grains and pulses, jaggery and sugar, salt and spices packed and spread in jute bags; toys, books and stationary for children.

A merry go round of products manufactured by local small scale units, some regional brands like Ghadi and Fena washing powders; Balaji Wafers and local bakery cookies, nuts and snacks; garden tools, earthen pots, line the path; scene dotted with barbers flashing their razors at a soaped countenance, mobile recharge danglers flying in the wind, next to ‘bidi’, cigarette and ‘paan’ vendors, women’s ‘salwar kameez’ sets, jeans and saris, too, do not miss out on this extravaganza of local and cheap wares that weekly and fortnightly are the attraction for village folk in the vicinity. And there are over 47,000 haats registered in the country and in excess of 25,000 melas, as also cattle and animal haats and State Agricultural Fairs offer a huge opportunity for marketers to explore rural communication and forge product and brand awareness. But to the discerning eye is the confusing question – in this maze of products that are displayed, which is genuine, what is duplicate, what is spurious and which are manufactured local brands?

An examination of primary and secondary data on rural consumer behaviour shows that for day to day consumption items people are inclined to spend less, purchase often, buy small packs and tend to get lured by duplicate and cheap but well labelled products. Duplicate products such as soaps, (Lifeboy), toothpaste (Kolgat), creams, oils, lipsticks, nail polishes all bearing labels having similar design and colours as the original brand can be easily spotted in bazaars and haats. These products are probably of dubious quality, contain substandard ingredients and are priced much cheaper than the key brand they imitate. The retailer gets a hefty margin; so he pushes the product to consumers who are taken in by his brazen salesmanship. The manufacturers of these products are fly by night operators, operating from unlicensed premises, part of a local mafia. Until an incident happens all is well for everyone.

Adverse impact on health
Spurious products include agrochemicals, paints, liquor, and pharma formulations, amongst others in a big way. It is estimated that appropriately Rs 2,000 crores per annum worth of spurious pesticides are sold in the country. The figure for pharma and liquor sales may be probably much higher. These operations are organised by moneyed people who are in cahoots with like-minded middlemen. The enforcement agencies know what is going on but everyone turns a blind eye until disaster happens. The proliferation of white fly attack on cotton crop in Punjab in Kharif 2015 is a recent example, when farmers suffered huge damages and losses due to use of spurious products. Subsequent raids on warehouses in various mandis revealed a sinister nexus between dealers and manufacturers. There are numerous similar incidents in various States. The Bhatinda Cancer Express, as the train is called, may well contain victims that have developed cancer through use of spurious pesticides and chemicals. The adverse impact on health from spurious pharma products such as cough syrups, vitamins, paracetamol and many other compounds must be huge, especially in rural areas where enforcement is weak and the consumer unaware and dependent on dealers. Food and beverages are easily contaminated through use of cheaper substances and packing material.

The Government has always laid great thrust on promoting Small & Medium Enterprises, agribusiness and cottage industry. Such enterprises are part of organised industrial estates and registered with District Industry Centres have relationships and loans from Public Sector Banks and give employment to a large rural population. Bureau of Indian Standards is involved in quality assurance and certification programs, as are ISO systems. Such enterprises produce products of acceptable minimum quality standards and comply with various statutory regulations such as excise, VAT, etc. Marketing is not their strength. Thus, they appoint wholesalers and sell their wares much cheaper than regional and national brands in order to garner volumes.

Such products and their suppliers need to be distinguished from distributors of duplicate and spurious products. These SME’s form the backbone of the industrial network and growth in India. They cater to regional populations and have the potential of becoming larger entities. Programmes that encourage such enterprises to develop their management and marketing skills, upgrade manufacturing facilities and quality infrastructure will go a long way in building regional industrial circles in every State that meet demand for quality products and services for agriculture, durables and consumer products. This is already happening but greater attention needs to be paid to regional development such that spurious and duplicate production is thwarted.

Menace of fake products
How do companies face the menace of spurious and duplicate products? One, they can take legal actions against known defaulters. Second, they can sensitise the authorities about such producers and dealers. Third, they can carry out relevant and easy to understand educational and promotional campaigns for making consumers aware of genuine products, their availability and prices. Fourth, the companies can check that their channel of distribution is not involved in selling and stocking substandard products. Training programmes, monitoring and counselling will help in protecting good dealers from the lure of unhealthy practices. Fifth, through their Associations they can exchange information on suppliers of spurious and duplicate products and jointly take actions in coordination with enforcement authorities. Sixth, the local NGO’s and SHG’s along with local self-Government functionaries can keep a watchful eye on the markets so as to report about such incidents. The Government, of course, can use mass media to educate the rural people about the dangers of using spurious and duplicate products.

Rural consumers have to understand that they must demand quality from the distributors, retailers and manufacturers. Corporates and Government must encourage the spread of a quality culture in rural India. Schools, colleges and educational institutions can also be roped in to conduct awareness programmes. At farm level, contract farming is a way to promote good agricultural practices.

International brands and regional brands must co-exist and complement good quality products and services being distributed by SME’s in the market. Together, the industry and consumer forums must curtail the onslaught of duplicate and spurious products in rural markets. It is a common cause, of national importance. The “Make in India” policy initiatives must include concrete steps in this direction such that High Quality spearheads the GDP growth to 9 per cent in the Manufacturing, Agriculture and Services sector.

Author: Prof CK Sabharwal, MD, Crop Health Products


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