Although often associated with bazaar and flea markets, fakes are also a common sight in shopping malls. A popular channel for selling counterfeit goods in a shopping mall is a retail kiosk, a free-standing retail merchandising unit located in areas with high consumer traffic. BrandMonitor has conducted a survey to study the sales volumes and techniques used by mall kiosks.
BrandMonitor researchers began by identifying stores that sell fakes and made a series of test purchases. Once the goods were confirmed as counterfeits through expert analysis, mystery shoppers were sent to the kiosks that were engaged in illicit trade in order to conduct interviews. The company interviewed a total of 100 sales personnel involved in the sale of fake goods. In addition, BrandMonitor conducted an online representative survey of Russian consumers aged 18 to 55, residing in cities with a population of 100,000+. The total sample size was 7,000 people.
Test purchases in mall kiosks followed visits to 3,000 shopping malls in over 40 Russian cities. The purchases concerned all categories of goods available in retail kiosks. The interviews of sales personnel were conducted in five Russian cities: Moscow, Kazan, Nizhny Novgorod, Ufa, and Krasnoyarsk.
Over five thousands shopping malls operate in Russia. Depending on its square footage, a mall can accommodate one to twenty or thirty retail kiosks. Data collected by BrandMonitor shows that mall kiosks sell over 25 billion rubles' worth of fakes every year.
Typically retail kiosks sell children's toys, electronics accessories, handbags and backpacks, as well as cosmetics and perfumes. Up to 60% of the goods are counterfeit, depending on the kiosk's profile and the category of the shopping mall.
Total annual sales of counterfeits in mall kiosks
The results of the survey research conducted by the law firm BrandMonitor
Most of the personnel selling counterfeits in mall kiosks have no problem admitting they are selling fakes
69% of interviewed sales personnel openly admitted that they were selling counterfeits. Another 31% chose to hide this fact, even though the test purchases had revealed fakes among their goods. 55% of interviewees appeared unaware of whether the sale of counterfeits was illegal. Another 35% believe that selling fakes is legal, with only 10% conceding that sellers of counterfeits are breaking the law.
Of the kiosk personnel who admitted their goods are copies and replicas, the majority (70%) claim that their products are of excellent quality. Another 10% argue that their goods surpass the genuine items in terms of quality. 20% of interviewees admit that the quality of their product may be inferior.
Negative experiences of mall kiosk customers
In order to examine the customer experience in mall kiosks, BrandMonitor carried out a survey of the Russian population. The results demonstrated that almost three quarters of Russians (73%) shop in retail kiosks. Such purchases are made occasionally rather than on a regular basis. Of the kiosk shoppers, only 13% make monthly purchases, with the rest (60%) shopping in mall kiosks infrequently, once every few months or less.
The number of affected consumers increases during holidays (including the days before New Year and Christmas) as people are attracted by seasonal souvenirs.
42% of mall kiosk customers have had negative experiences with their purchases. Specifically, 21% of consumers reported the absence of a warranty, 18% ended up with a fake, and another 13% bought a faulty or low-quality item. The majority (70%) of the shoppers decided to return the unsatisfactory goods. Two thirds (69%) of such consumers were successful, while the others suffered disappointment as the seller refused to take back the goods.
Sales in mall kiosk are often dismissed as insignificant and causing little damage to the brand owner. Combined sales of such kiosks are comparable to those of large warehouses.