EM – The problem of fake and knock-off goods floating around in the elevator market not only affects the safety of customers but also seriously damages the reputation of genuine businesses as well as diminishes the trust of local consumers in the Vietnamese elevator industry.

The problem of imitation products, poor quality goods, and intellectual property infringement is always a topical issue, whichhas never ceased to be hot. This matter not only threatens consumers’ interests, but also impacts genuine business development, causing a bad reputation for the national business environment.

Counterfeit goods, faux-pas products – a common matter of most industries

Counterfeit goods are products and goods produced illegally with similiar outlook as those genuine products and goods permitted by the State to be produced, imported and consumed in the market; or products and goods with inaccurate use-value and certificate of origin.

Fraudulent goods are designed to look like authentic products. Judging from their appearance, counterfeits may seem to be almost identical to the originals, but are often made from low-quality materials.

Counterfeit goods are products that are circulating in the market that are not genuine products marketed by the main manufacturer or distributor. This is a type of goods, which imitates products of reknowned brands or products that have been licensed by the state to circulate on the market.

Counterfeit goods are manufactured to resemble authentic products in terms of shape, color, and even ingredients printed on the packaging. In other words, counterfeit goods are infringements of intellectual property, “impersonating” products of reputable brands to make profits.

Counterfeits and imitation goods are floating on the market, “steal” marketshare of legitimate businesses

In fact, counterfeit goods are made with extreme sophistication, much like the authentic products to deceive consumers. With the production process not needing to meet technical standards, hence, cutting down on costs of raw material reducing product quality and not fulfilling tax obligations …, the price of fake and imitation goods is much cheaper.

Thisprice advantage has captured the attention of many consumers and distracted consumers from their direct contribution to these illegal acts, which eventuallycauses heavy damages to themselves as well as the economy.

In accordance with the data provided by the Ministry of Industry and Trade, the market management force has presided and coordinated with relevant functional departments to inspect about 72,641 cases, detect and penalize over 43,964 cases of counterfeiting violations in 2022; the total amount of payables to the state budget is 348.2 billion VND.

The many forms of replica merchandise

Nowadays, counterfeit goods are produced and sold as a result of companies profiteering from customers’ trust and poor understanding about several prestigious brands.

Even numerous firms also take advantage of loopholes to declare false names, types of goods, origins etc. In other cases, businesses conceal the origin and route of shipments, import commodities from country A to country B to attain the status of origin from country B and then re-import these consignments to Vietnam, and attach it with fancy advertisements such as “Made in Japan / Korean technology, …”.

This situation occurs not only in the Vietnamese market but also in foreign markets, especially in the field of elevator components.

Taking advantage of the loophole, many businesses falsify the goods’ origin by concealing their route of the shipment.

A great number of businesses and individuals abet and use components, equipment and finished products with unclear or fabricated origin and labels to install and repair elevators for clients. In addition, knock-off goods are also disguised under the name of OEM (goods sold from the production factory of the established brand).
OEM: original equipment manufacturer

For example, the sale of unauthentic Mitsubishi elevators of Hung Quang Elevator Trading Co., Ltd. in Ho Chi Minh City took place in 2017. In detail, Hung Quang Company signed a contract value of 2.6 billion VND to install 4 Mitsubishi elevators at Van Loc Phat Company in Binh Duong.

However, upon acceptance , Van Loc Phat Company discovered a lot of unreasonable points in the importing documents about origin, brands,… for the installed Mitsubishi elevators. To verify this matter, Van Loc Phat Co. has contacted Mitsubishi Elevator Company Vietnam and Mitsubishi in charge of the Asia region for explanation.

After that, Mitsubishi Vietnam and Mitsubishi in charge of the Asia region both issued official letters to confirm that the 4 installed elevators were not Mitsubishi’s trademarks and were not manufactured by Mitsubishi. Furthermore, Mitsubishi Vietnam affirmed that Hung Quang Company was not an authorized agency for Mitsubishi.

Mitsubishi experts checking the fake elevator sold by Hung Quang Company to Van Loc Phat Company.

Although the elevators are labeled as Mitsubishi, they’re actually faux-pas goods. (Photo: Tuoitre).

Along with selling fake and imitation goods to customers for profit, plenty of elevator businesses now use brand names similar to that of established brands, to make customers confused and mislead them about the origin of products.

Meanwhile, their elevator components and equipment are mainly from various different sources, which are then assembled into one elevator. This elevator is to be sold to clueless customers.

Besides, many companies manufacturing and selling fake goods advertise functions that even the authentic products cannot afford or quote prestigious sounding origins such as “EU, Japan,…”, information that genuine businesses do not dare to write in their contracts and quotes, to attract buyers.

The characteristics of these fraudulent companies are small businesses with insufficient reputation, ambigious branding in the market, … and these firms can easily evade responsibility, run away, close down when detected or denounced by clients.

Furthermore, a lot of elevator businesses also deceive customers regarding the method of using the cabin, with a traction machine originating from a big brand, other components and equipment can be from any different sources, as long as the completed elevator can be put into operation .

Elevatorswithauthentic-appearing outlook , but poor quality are also the cause of various failures, malfunctions, or far more dangerous, elevator accidents.

Counterfeit goods “steal” market shares from genuine businesses

The act of producing and trading in counterfeit goods and imitation products occur in all fields,locations, alongside with the production, circulation, import and export sector. These unauthentic commodities are diverse in design, “flexible” in price and supremely abundant in types.

Besides accumulated economic damage to businesses and the general market, the issue of the circulation of fraudulent goods in the elevator segment also seriously threatens the safety of consumers.

Almost all trustworthy brands which are well-known to consumers are at risk of being counterfeited.

From an economic perspective, fake and imitation merchandise greatly affects the profits of genuine enterprises, thus generating a negative impact on their decision to increase investment.

The usage of fake parts and accessories makes elevators vulnerable to damage, malfunction and reduces their lifespan

Furthermore, the invasion of faux-pas pushes the products of genuine enterprisesaway from potential partners and customers as well as undermining their ability for innovation. This is due to the rapid appearance of a fake product every time its genuine version is debut on the market, causing misleading impression of consumers towards theproducts of genuine parties.

On the other hand, due to a price advantage compared to “purebred” goods, counterfeit goods and imitation goods cause the sale of genuine products with clear origins to fall into a state of stagnation with declining revenue.

The production of counterfeit and imitation goods and circulation of these commodities in the market regardless of consumer’s safetynot only deeply weakens the reputation of the fraudulent business, but also lessens the reputation of other elevator enterprises as well as the trust of buyers in the Vietnamese elevator industry.

Entering a new stage of development with one of the main goals and instruments being creativity and productivity, instead of the labor force and material resources, Vietnam should solve the problem of counterfeit goods more urgently than ever.

Dr. Vo Tri Thanh – Director of the Institute for Brand Strategy and Competition.

Speaking at the Thematic Dialogue: “Anti-counterfeiting and imitation goods on the e-commerce platform” in May 2022, Dr. Vo Tri Thanh – Director of the Institute for Brand Strategy and Competition emphasized: “If this problem cannot be resolved, it will destroy creative innovations and aspirations of enterprises. No one wants to create or develop when the market is full of fakes and clones.

Therefore, we must not only consider this as a problem but also an enemy of development in the process of implementing the goals of prosperous development. This is really an aggressor for every economy, every country.”

From the government’s side, the issue of counterfeit goods floating on the market induces large economic loss due to the failure to fulfill tax obligations, causing a great reduction in the state budget.

In the long term, this issue also reduces Vietnam’s investment environment ranking index compared to the other nations in the world. Notably, in the status quo where Vietnam has signed many prominent free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) or the EU-Vietnam Free Trade Agreement (EVFTA), in which enforcement of intellectual property rights is always one of the fundamental contents of the commitment.

In order to achieve practical benefits for the elevator industry community, on April 20^th, 2023, the Vietnam Elevator Association (VNEA) and the Vietnam Association of Anti-counterfeiting & Trademark Protection (VATAP) signed a memorandum of understanding on cooperation in the areas of anti-counterfeiting, protection of elevator maintenance and repair brand, business.