6, No. 2, May 2005
Confidence Games on Canal Street: The Market for Knockoffs in New York City
New School for Social Research
On a sunny Sunday afternoon in May, a well-dressed woman in her
late 60s is shopping on Canal Street in New York City. She is with
what appears to be her granddaughter, a girl of 10 or 12. The woman
is looking at leather handbags being sold out of a large black plastic
trash bag by an Asian vendor at the corner of Canal and Greene Streets.
The woman looks at different color bags--black, blue, red, and white--slinging
them over her shoulder, turning one way and then other, asking the
child's opinion of each. After a bit of imaginary play as to what
the various bags might look like while being carried, she selects
the white one. The handbag features the distinctive diagonal stitching
and opposing interlocked double Cs of the Chanel trademark design.
The woman haggles with the vendor, eventually handing over a $20
bill. (A comparable handbag at the Chanel boutique on Fifth Avenue
uptown costs well over $1000.) With the new purse safely tucked
away in a small plastic bag, the woman takes up the child's hand
and they go off in search of ice cream.
Tourist guides tout Canal Street as a free-wheeling shopper's paradise overflowing with goods available at bargain-basement prices that are always negotiable. It is especially noted as a place to find designer products: purses marked with the Louis Vuitton and Coach logos, perfume identified as Chanel or Calvin Klein, and all manner of accessories bearing the distinctive Burberry plaid. But for the most part, these items are counterfeit, violating US intellectual property law, which governs the use of trademarks, patents, and copyrights.
Taking stock of the field
Canal Street cuts clear across lower Manhattan, connecting the Manhattan Bridge on the east with the Holland Tunnel on the west, providing a direct route from Brooklyn, Queens, and farther out on Long Island to New Jersey and then beyond to the rest of the American continent. Halfway between the bridge and the tunnel, Canal intersects with Broadway, one of the world's most celebrated avenues. The area radiating from the corner of Canal and Broadway is gritty, filled with the noise of traffic and the sounds of human activity, the smells of Diesel exhaust and meat being grilled, the sights of urban decay and renewed metropolitan life. The intersection is a threshold for two of New York's more affluent neighborhoods, Tribeca and SoHo, and one of its most enduring and still growing ethnic enclaves, Chinatown. The main market for counterfeit branded products on Canal extends one or two blocks either side of Broadway, depending upon whether one is on the north or south side of the street.
The corner of Canal and Broadway is accessible with one transfer via the entire New York City subway system. There are also municipal and tour-group buses servicing the area throughout the day. People come from nearby and from all over the world to shop among the neighborhood stalls and street vendors. They are attracted by the area's carnivalesque atmosphere as a place where plastic junk and tacky souvenirs are presented alongside the most extravagant "bling-bling" gold jewelry. The market offers respite from the "McDonaldized" experience of modern consumer society (Ritzer 1993), a tonic for the predictable rationality of brightly lit, climate-controlled suburban shopping malls.
The market for counterfeit branded products on Canal Street is robust. An informal survey conducted in spring 2004 revealed 360 vendors (including food cart operators) in business in a four-block area. More than 40 percent of these vendors openly engage in intellectual property rights violations, including selling pirated CDs and DVDs and counterfeit handbags, pens, perfumes, hats, and scarves. The sidewalk is often filled to capacity with shoppers carrying black plastic bags bulging with what are obviously handbags.
Many of the other vendors sell merchandise "inspired" by designer products, but not using counterfeit brand identities per se. These include bags marked "V" instead of "LV" (for Louis Vuitton) or "Prego" instead of "Prada." In many cases, these products look substantially similar if not identical to the trademarked products that inspired them. These vendors could easily be engaging in intellectual property rights violations by adding or changing logos, "Prego" to "Prada" for example, at the time of purchase. This is a fairly standard practice according to consumers who confirm having vendors offer to make the switch. Indeed, importing unbranded merchandise and adding counterfeit brand identities at the point of sale is one of the primary ways of getting past U.S. Customs officials according to the International Anti-Counterfeiting Coalition, a fashion-industry advocacy group based in Washington DC (D. Pogoda, personal communication, 23 Apr. 2004).
The division of labor on Canal Street appears to be primarily along ethnic and gender lines. The vendor stalls (fixed physical locations, either storefronts or permanent sidewalk displays) are staffed by and large by Asian men, including those from the Indian subcontinent. The food vendors are also chiefly men, usually Middle-Eastern. The roaming vendors selling counterfeit brand watches are nearly all African men, reportedly mostly Sudanese (Paradise 1999). Most of the purse and CD/DVD vendors are Chinese women, who do not operate from fixed locations but who move from corner to corner as crowds gather and disperse.
The market changes according to time, day, and climate. As might be expected, lunchtime, evenings, holidays, and weekends are periods of the greatest activity. Those variables also affect the demographics of the shopping population. Lunchtimes have what appear to be a higher percentage of office workers, due to the area's proximity to municipal and Federal government buildings and to the proliferation of commercial services companies north of the Financial District. Evenings, holidays, and weekends have a higher degree of tourists, both from the local Manhattan neighborhoods and outer boroughs and from out of town. The activity is higher during times when weather is favorable for walking, as also might be expected from an open-air shopping district.
There is little activity before 11:00 a.m., and vendors can often be seen with counterfeit merchandise openly on display. As the market becomes more crowded and the risk from the presence of the authorities increases, the merchandise is concealed under black cloths or behind screens and the transactions take on a more surreptitious air. The vendors use walkie-talkie-enabled cell phones as an ad hoc security system to notify one another of the presence of anti-fraud inspectors. Vendors are arrested regularly; consumers of counterfeit or pirated products never are. Most of the stalls and vendors close by 8:00 p.m., though that can change with daylight savings time and longer periods of sunlight during the summer.
Tracking consumer confidence
The sociological literature on counterfeit-branded product consumption is virtually nonexistent. A search of the sociological abstracts on the CSA Internet database service returned zero entries. Queries on ProQuest, Google, and other search engines were similarly unfruitful. Consumer attitudes toward counterfeit branded products have been studied from a marketing perspective, but not to a substantial degree. Three studies, all conducted outside the United States, establish a rational-choice perspective on the part of consumers toward the purchase of counterfeit branded goods, governed by a calculus of desire, price, and risk (Block, Bush & Campbell 1993; Cordell, Wongtada & Dieschnick 1996; Gentry et al. 2000). The phenomenon has been more widely studied in terms of intellectual property rights, primarily to describe the nature of the problem and what remedies might be available to those whose rights are seen as being infringed upon. There have been numerous stories in the popular press, typically informing consumers of the illegal nature of counterfeit and pirated goods, often connecting trade in them to terrorist activity.
Following Alan Alridge's categories of consumption theories (2003), one way to characterize the counterfeit-branded product consumer is as a victim, as someone who bought a product represented as genuine that is actually a fake. The consumer of counterfeit branded products might also be seen as a dupe for attaching value to a product simply because it uses a distinctive mark that bears no "authentic" connection to the item itself. (It might be said that brands of the legitimate variety perform the same function, differentiating like products from one another based on associations that have little or nothing to do with quality or functionality.) But the consumer of counterfeit branded products can also be seen as a communicator, demonstrating literacy in the meanings attached to certain symbols in the marketplace.
Research conducted among consumers of counterfeit branded products on Canal Street, as well as consumers surveyed through snowball sampling, suggests they typically view themselves as what might be termed rational-acting communicators: they understand the status value and other connotations of premium brands and make a conscious choice to consume counterfeits in negotiating exchange value, socially and economically. If presented with two handbags of the same material, design, color, and quality of manufacturing, one a generic and the other marked with a counterfeit designer logo, such as Kate Spade or Prada, they would invariably choose the latter and be willing pay up to twice as much for it, depending upon the price point (which would still be a fraction of the genuine article's cost).
Erving Goffman's dramaturgical theory (1959) is useful in understanding the rational-acting communicator. For Goffman, social behavior can be understood by looking at its theater-like aspects: people are like actors in an unending drama, playing out the roles society requires them to play--the "front stage" is the social space where various roles are acted out in the presence of others, and the "backstage" comprises those places and times where things that are normally suppressed are revealed. Shopping is "dress rehearsal," a backstage where anxieties and vanities can be expressed.
An important factor in counterfeit brand consumption is what might be termed the "imaginary audience," those who might approve or disapprove of consumer items under consideration. The imaginary audience could include family, friends, peers, or a generalized other, held in the mind as party to identity construction for front stage presentation. Their endorsement of values such as "good taste," "high class," "fashion-forward," or whatever other prepackaged attribute the consumer wants to adopt, is purchased at deeply discounted prices through counterfeit brand consumption.
One possible social sanction of consuming counterfeit branded products is the shame associated with what might be called consumerist "passing," of being exposed as playing a kind of confidence game. But as Goffman notes, "The confidence man [in this case, the rational-acting communicator] is in a position to hold the whole 'legit' world in his contempt" (1959, p. 18, fn1). In interviews, rational-acting communicators say they rarely try to hide from others that their counterfeit items are not genuine.
It can be argued that it is in the "'legit' world" that confidence games are being played. Through what can be called the "aura" of the brand (Carducci 2003), the material world of consumer goods is enchanted, thereby creating added value for both producer and consumer. For producers, the added value of branding is the higher prices and profit margins they command. For consumers, it is the confidence acquired through the brand's aura as a prosthetic in social situations where goods are traded as information. (There is a saying in the business world, "Nobody ever got fired for buying IBM"; the same holds true for social situations when it comes to wearing Gucci.) The recognition and acceptance of these symbols by others is a form of what Goffman terms "team collusion," the subtle signals sent between social dramatis personae while performing to ensure that the suspension of disbelief is maintained.
Yet rational-acting communicators are not deluded. Their decisions to acquire ersatz commodity-signs for conspicuous display are pragmatic and informed. This would appear so even though they may enact other conceits, which Goffman terms "mystifications," to sustain an aura of authenticity before their audience, be they real or imagined.
Aldridge, A. 2003. Consumption. Cambridge: Polity.
Block, P.H., Bush, R.F., and Campelli, L. 1993. Consumer acceptance in product counterfeiting. Journal of Consumer Marketing 10(4), 27-36.
Carducci, V. 2003. The aura of the brand. Radical Society 30(3 & 4), 29-50.
Cordell, V., Nittaya, W., and Dieschnick, R.L. 1996. Counterfeit purchase intentions: the role of lawfulness attitudes and product traits as determinants. Journal of Business Research 35 (Jan.), 41-53.
Gentry, J.W., Putrevu, S., Shultz II, C., and Commuri, S. 2000. How now Ralph Lauren: the separation of product and brand in a counterfeit culture. Unpublished manuscript. Retrieved March 15, 2004 from the World Wide Web: http://www.cba.unl.edu/faculty/jgentry/acr2000.htm.
Goffman, E. 1959. The presentation of self in everyday life. New York: Anchor-Doubleday.
Paradise, P.R. 1999. Trademark counterfeiting, product piracy, and the billion dollar threat to the U.S. economy. Westport, Qurom.
Ritzer, G. 1993. The McDonaldization of society. Thousand Oaks: Pine Forge.