When, last year, customs officers at Los Angeles Airport spotted a number of small packages marked "bracelet’, "decoration" and "wall clock", their suspicions were aroused. And, rightly so. Opening them, they found USD1.3m worth of watches: Panerais, Patek Philippes, Omegas and lots of Rolexes. Or, at least, that’s what they would have cost had they been real. In fact, all 41 of the watches were fakes.
They also represent just a tiny fraction of the global trade in counterfeit watches, sales of which boomed over the pandemic, as the bored or comfortably-off looked online to fulfil their horological cravings. Figures are hard to rely on but upwards of an estimated 40 million fakes are circulated every year, according to the Federation of the Swiss Watch Industry, some 25 per cent more than the Swiss watch industry produces itself.
Those fakes make for a business worth USD3 billion dollars a year—with a record year of 2013 seeing 90,000 fakes confiscated in Dubai alone, the city the Federation identifies as one of the key strategic storage hubs through which fakes are then exported internationally in those many small packages. Watches now account for between 20 and 35 per cent of all sales of counterfeit consumer goods—that’s despite them being illegal in most countries.
Not that this seems to dissuade anyone buying a fake. Or those who manufacture them—mostly in China, Hong Kong, Singapore and, chasing cheaper labour, increasingly Vietnam and Thailand—often on sophisticated factory lines also making legitimate parts for the legitimate watch industry. They’ll take an order for so many “Rolex-style” cases, for example, as they would for any other watch component. Bit by bit these various components come together at various locations and, at some nebulous point involving the application of brand names, a look-a-like becomes a counterfeit and a criminal matter.
“The battle against the counterfeit watch market is very hard to win. It’s really about reducing their visibility as much as possible, about intervening on a diplomatic and political level,” says Yves Bugmann, president of the Federation of the Swiss Watch Industry. “Counterfeiters want to benefit from the value that often world-famous watch brands have created, and people want to access a certain social prestige that counterfeits present. But while some of them we just can’t influence, we find quite a lot do respond to a good argument.”
The problem is, perhaps, that no one of these arguments is a killer. Those countering the counterfeiters speak, for example, of the risk of buyers exposing themselves to malware, or to having their credit card details stolen—this does happen but the sophistication of the online marketplace, and the guarantees that underpin it, make this increasingly unlikely.
They speak too of the poor quality of counterfeit watches: the cheap metals, the likelihood of them lasting not long at all, their inability to fool anyone that they’re the genuine article. But that was then. We’re now in the era of the so-called “super- fake”, even of the ultra-fake. The counterfeiters’ embracing of the latest manufacturing technologies, from CNC machines to 3D printers, means the top-notch counterfeit today is all but indistinguishable from the real thing, at least to the naked eye of a non-expert. Knowledge accumulated over time means the fakers have only got better, and faster, at what they do. That’s concerning when, it’s been argued, the less distinguishable a fake watch becomes from the original, the more consumers become unwilling to pay the premium for the real thing.
Pre-owned watch dealer Watchfinder & Co noted in a 2023 report that five years ago 80 per cent of counterfeit watches sent into its stores were easily identified as fake, with 20 per cent needing closer inspection. Now those figures have been reversed. Of course, this is an aesthetic judgment, a question perhaps of less-than-perfect finishing; the counterfeit may still be well-made and contain a dependable movement, but it will lack the technology—in terms of materials and movement—of the genuine article. Some fakes can only be spotted in being handled—the hand-setting is off, or in daylight the colour isn’t quite right—which is no good to the online buyer.
“The fact is though that the counterfeiters’ emphasis is on the look of the watch because that’s all the guy who buys a counterfeit really cares about,” explains Fabrice Gueroux, author of Real & Fake Watches and an independent authenticator for many high-rolling collectors. “Yes, you can sometimes close your eyes and hold a counterfeit in your hands and there’s something that doesn’t feel right about it, but you need deep knowledge of the genuine watch for that and, of course, that’s what most people don’t have. With enough time even the best fake shows itself, and the best ones have put in the extra time on the paintwork, the fonts, the bracelet. But even I’m surprised by just how good a counterfeit can now be”.
That, he explains, is down to two factors. On the one hand, Gueroux laments, “the quality of some Swiss watches is not as high as is always claimed—so the borderline difference in quality between counterfeit and genuine watch can make spotting those counterfeits the hardest. With some brands [typically those seeking an especially high margin] the quality of the counterfeits is actually better...”
On the other hand, counterfeiters—and he says there are five mega-factories in China that collectively dominate counterfeiting, and which are known to make many millions of fake watches every year—used to have little competition and few, closely protected distribution channels. Now they have lots of competition and the internet has blown the market wide open, necessarily pushing quality up.
“Sure, many people buy a counterfeit because they just want the same look at the best quality for the cheapest price,” says Gueroux, “and they know that the real thing would cost, say, USD20,000. But then that person sells that watch on as ‘genuine’ and prices it accordingly to be convincing. And so on, such that there are so many good counterfeits [passing as genuine] on the market now.”
As for those Swiss makers still at the top of their games, they’re left facing off their counterfeiters, locked in an unending arms race of serial numbers, hallmarks, engravings and holograms—and, eventually, their inevitable copies too. “[And while] there are a lot of technical anti-counterfeiting and traceability measures now being used and developed,” notes Bugmann, “ultimately they’re of no use if the consumer deliberately wants to buy a fake”.
It does make the Swiss industry rightly worried about buyers being duped with, say, a dodgy IWC or Hublot though. And the most well- heeled and well-connected buyer can fall foul: the Brazilian footballer Neymar, rapper Little Baby and musician John Mayer have all bought watches they only later found out were counterfeit, leading to legal action in some cases.
Even brands and expert valuers can be conned: the most expensive Omega ever sold at auction, a supposed 1957 Speedmaster sold for USD3.4 million by Philips to Omega in 2021, turned out to be a so-called “Frankenwatch”, put together using parts from various vintage watches. Embarrassment perhaps prevents other stories of being duped from circulating; or, perhaps, people are just not duped in this way all that often.
Watchfinder & Co suggests that one in five watch buyers have been victims of purchasing a fake watch, the kind of figures, no doubt, that incentivised Rolex to take ownership of the problem by launching its own certified pre-owned programme in 2022. Of course, many other buyers—the small majority, according to one study—know full well that they are buying a fake watch. After all, the vast majority of fakes—Rolexes with quartz movements and the like—are still obviously so.
The counter-counterfeiters even make the appeal to guilt. There’s the rather tired line about morally minor crimes—as they may be perceived—being used to fund major ones, the likes of human or drug trafficking, though this is more a bogeyman argument than one that’s well-evidenced. The Federation of the Swiss Watch Industry speaks of counterfeiting’s negative impact on employment and revenue—to the tune of EUR1.9 billion annually—across the legitimate industry.
But the vast majority of people buying a fake would not buy the real thing were the counterfeit not available—they couldn’t afford it, yet still crave the status power that in part makes the genuine brands so appealing. This is especially the case in rapidly developing economies where peer comparison pressures are more stark. Indeed, the first in-depth studies of why sales of counterfeits are growing—led by Dr Xuemei Bian, professor of marketing at Northumbria University, UK—suggest that the motivation for buying a fake is far more sophisticated, and twisted, than the simple fact that of its relative affordability.
“One clear driver in purchasing [counterfeit watches] is the thrill of the hunt,” she argues. “There’s a fun factor in finding the best counterfeit for the right price. There’s a sense now of people who buy counterfeits belonging to a kind of ‘secret society’, one that’s curious about the original items and the counterfeits alike, especially in relation to their quality. There’s a transfer of the interest they would have had in the original article to the counterfeit. It’s a gateway to enjoying Rolex and other brands”.
In other words, Dr Bian’s research reveals, there is a growing culture of counterfeit buyers who buy them out of admiration for the artistry inherent in the fakery, as one might take a pleasure in just how convincing a fake Renoir is relative to the original. What’s more surprising, Dr Bian adds, is the incorrect assumption that counterfeit watches are only bought by those who can’t afford genuine ones.
“We found that even affluent people who can buy the real article buy counterfeits,” she says. “In part that’s because other people are less likely to question whether their watch is real or fake. They look the part. In part because they just see mixing up their watches—real and fake—as fun, or a bit naughty.”
So what of the ethical question? Don’t people just think buying a counterfeit watch is wrong? The Fondation de la Haute Horlogerie’s anti-counterfeiting campaign of a few years ago was based around the statement “Fake Watches are for Fake People”. But, Dr Bian argues, this highlights a disconnect between what a prestige watchmaker may think of as wrong, and what a consumer might.
Take, for instance, arguably the watch industry’s strongest case against counterfeits: the plain and simple one that it’s an infringement of their intellectual property, the investment the real makers have put into building the brand value that makes counterfeiting their wares worth it in the first place. This is not necessarily regarding design per se—this typically needs to be protected under patent, and when patents expire watch brands are free to copy one another’s designs, and maybe it doesn’t help their cause that they have done so most liberally—so much as of names, logos and other trademarked elements. A replica or ‘homage’ that’s a precise copy all except the branding isn’t a counterfeit— ethically maybe it is, but not usually in law.
“Of course a lot of people know what they’re buying even if the ad calls the counterfeit a ‘replica’ or some such kind of code. But what we’re dealing with here is theft of intellectual property, of the ‘Swiss-made’ label, of the maker’s reputation,” says Bugmann. “This can be frustrating for the industry especially given that, for the EUR300 you might spend on a fake, you could actually buy a good Swiss watch—maybe not one from a top luxury brand but from what’s still a prestige manufacturer.”
An affront to these intellectual property rights really can be detrimental to the top brands’ reputations too. If counterfeiters reduce the branded products’ exclusivity, people who could afford the real things are less inclined to buy them: if there are fake Rolexes everywhere, the appeal of the genuine article is limited, in part lest it too be considered a fake. Research by Moty Amar, professor of marketing at Ono Academic School, suggests that the moral disgust—to overstate it somewhat—felt towards a counterfeit not only negatively affects it use, but also attitudes towards the genuine item that, as it were, looks like the counterfeit.
“A copy of one of our watches—all copied except putting ‘Bell & Ross’ on it—is a counterfeit,” states Bruno Belamich, the brand’s co-founder, in no uncertain terms, “and that is an infringement of intellectual property rights. Counterfeit watches are not authentic products but imitations designed to copy the look and feel of the brand-name watch. It’s the desirability of the brand [that we have created] that’s ‘the cause’ of the desire to buy counterfeits.”
Unfortunately, further psychological studies have suggested that while the perceived risk can influence the rationalisation of why people buy counterfeits, ethical concerns—the likes of "what impact might I have on Cartier’s bottom line?"—don’t typically register at all. Yes, many strategies are used to dodge ethical consideration. Some see buying counterfeits as just making perfect consumer sense— they’re entertaining, cheap, almost disposable; others deny responsibility—"I’m merely the smallest cog in a long chain of events over which I have no influence"; while others argue that the market for counterfeits is beneficial to the brands copied. It’s a way of paying them a back-handed compliment.
Others, remarkably, even see their decision to buy a counterfeit as a form of retaliatory behaviour—a way of hitting back at brands they see as acting in a socially irresponsible way through their ‘unreasonably high’ pricing. But, whichever way you cut it, the idea that buying a counterfeit watch is in some sense wrong barely even figures, especially when it comes to dry legalistic matters of IP.
Besides, that’s only relevant to modern watches anyway. The whole world of fake watches is leaning towards ever greater complexity given the growing interest in vintage watches in recent years. Frankenwatches are said to now account for a fifth of all vintage watches sold in the US. Over the course of a watch’s lifetime it’s possible that the case will have been over-polished or the dial reconditioned; indeed, send a watch back to its maker for servicing and, until this vintage market won recognition, it was standard practice to make the watch look as new again as possible. But is a vintage watch with undisclosed reconditioned parts—perhaps reconditioned long before the current owner took possession—a counterfeit? Is, similarly, a customised watch, or a “modification”, in some sense counterfeit? These questions are still being worked through.
“Put modern hands on a vintage Monaco and it’s not exactly a counterfeit, and yet it will have a very real impact on its value,” stresses Jonathan Scatchard, founder of specialist dealers Vintage Heuer. “But the problem is that the quartz crisis [of the 1970s and 80s] caused all sorts of anomalies when so many Swiss watch companies went bust and parts were distributed and used across the industry. Authentification services have advanced considerably in recent years. But the vintage watch market has also made the question of what is a counterfeit and what isn’t even more of a grey area.”
And, adds Fabrice Gueroux, assuming that we will continue to live in a consumer culture that keeps telling us to define our self-worth through our possessions, it’s only going to get greyer still.
“The manufacturer can’t win this battle,” he states. “You have reality and you have PR. You see the manufacturers spending a lot of money on anti-counterfeiting tech but it’s all BS. They can’t keep up. You know the only way to tackle watch counterfeiters? It’s for manufacturers to push up the quality of their products, and to keep pushing. We’re getting to the point where that’s the only way that the fake watch is going to look fake.”
Originally published in Esquire ME
