CONSUMER BEHAVIOR TOWARD LUXURY AND COUNTERFEIT LUXURY PRODUCTS IN VIETNAM

The research explores consumer behavior towards luxury and counterfeit luxury products in Vietnam, analyzing factors influencing their choices and the impact on society, businesses, and the state.

CONSUMER BEHAVIOR TOWARD LUXURY AND COUNTERFEIT LUXURY PRODUCTS IN VIETNAM
Full name: Pham Hien Mai
Class: Advance Finance 60B

I) INTRODUCTION
1. Background
Nowadays, social development has brought about human demand rising in all aspects.
Every component in society has beauty needs, higher living standards and people always
towards the best products and services. According to the news agency CNBC, in a Nielsen
poll conducted in 58 countries, Vietnam has the proportion of consumers who prefers luxury
products 3rd highest in the world, only after China and India. Vietnam is considered one of
the fastest growing economics in the world. In the period of 1998 and 2003, its average GDP
revealed around 6.8% and boosted up to 8% for the period of 2004 and 2007 and continued to
increase from 2008 to now. After taking part in WTO, Vietnam has experienced the powerful
economic and has improved standards of living. Therefore, the consumption trend among
Vietnamese people have changed. Various of luxury brands which cannot join to the market
because of the shortage of media are now ready to be available in the Vietnam market with
many choices for consumers. The Vietnamese people aren longing for owning luxury goods is
not surprising, especially in the context of multiple relationships with western countries are
growing. The super rich in Vietnam increased ranks rapidly which have contributed to boost
consumption of luxury in thriving economy in Vietnam today. According to the Knight Frank
Wealth Report 2015, the most high- income people in Vietnam are predicted to double in
2024 into 300. The growth rate of 159% has helped Vietnam become one of the fastest
growing rich countries in the world, with the net assets of up to $30 million. Followed by
Vietnam is one other ASEAN members, Indonesia with 132% growth rate. The super-rich
individuals in Asia hold a total net assets of about 5.9 trillion USD. This figure exceeds the
North American region for 5.5 trillion. Not only that, the report also predicted that in the next
decade, the super rich population in Asia will continue to increase by 91%. A survey
conducted by Nielson concluded that Vietnam is the third country in the world for loving
luxury products, only behind China and India. Moreover, 56% of people in the research
answered that they are ready to spend a lot of money for products from famous brands rather
than products from less well-known brands although they have the same function. Another
research from the company Hakuhodo in Japan noticed that female customers in Ho Chi Mnh
City are the only customers in Southeast Asia who prefer the design of product rather than the
function of product. All these elements create a craze famous brands in Vietnam, especially in
jewelry, fashion, car, wine items,…
Currently, counterfeit luxury goods are one of the most severe problems in the society.
Negative consequences which it brings to society is not trivial, such as affecting health,
finances of consumers, depletion of consumers confidence to the transparence of the
commodity market, reducing the prestige of true manufacturers, etc,… Through a number of
surveys showing, counterfeit luxury products are present in many segments of the market,

from grocery store on the regional market to urban market, even sneak in high-end
supermarkets in big cities such as Hanoi City and Ho Chi Minh City.
2. Research Methods
Qualitative Method
- Analize newspaper, books, maganizes, etc,… related to the topic
- Collect information in the Internet, websites, other researches
Aim
- To have an extensive view about consumers behaviour in the market, especially ….
- To know more about list of luxury products and counterfeit luxury products that Vietnamese
people pay attention
Quantitative Method
- Carry out a survey in which 100 Vietnamese people will be chosen randomly to perform a
questionaire
Aim
- to have a general view of the level in which Vietnamese people show their interest and the
reasons why they choose to buy luxury products and counterfeit luxury products.
II) LITERATURE REVIEW
1. DEFINITION OF LUXURY GOODS
Luxury goods are not essential for life, but are considered to be desirable commodity in a
society or a culture. The ability to buy or sponsor a luxury goods is proportional to a
personal’s income or assets. In other words, when people turn to higher earnings, they become
more difficult and more likely to purchase luxury goods.
* Quality of luxury goods
Although some items are considered to be luxury goods are not necessary to have high
quality, but luxury goods are often considered the most advanced in the market in terms of
quality and price.
Luxury goods can include high fashion clothing, accessories, electronic devices, perfume,
cosmetic, etc,… Many other markets have their own segments of luxury goods, such as cars,
yachts, wine, coffee, tea, food, watches, clothing and jewelry.
2. DEFINITON OF COUNTERFEIT LUXURY GOODS
“Counterfeit” is the word refering somthing fake which tries to deceive people into thinking
these are real.
Counterfeit luxury goods are items which violate the copyright laws, try to fake products
from famous brands in the market to deceive consumers by selling at high prices in order to
performance, durability and reability. Counterfeit luxury goods are not only harms the
economy, damages the effort of true businesses but also have negative impact on the faith and

health of consumers.
Counterfeit goods are counterfeited in many different forms including four basic types:
+ Imitation of quality and utility: Goods are useless or value improper use of origin, nature,
name and use of goods.
+ Counterfeit labels, packaging goods: This is type of faking names, address of other famous
brands on the label or packaging the same type of goods or counterfeit about the origin of
goods, place of manufacture, packaging process
+ Counterfeit intellectual property: goods, goods packaging branded, signs identical or
indistinguishable marks, geographical indications are protected for the item without
permission owners of trademarks, the organization managing the geographical indication or
pirated copies are produced without the permission of the owner of copyright or related rights.
+ Counterfeit stamps, labels, packaging of goods: Including imitation of decals, commodity
labels, cargo packaging, quality stamps, anti-counterfeit stamps, warranty slip, plastic lining
of goods with counterfeit content name, business address, origin of goods, place of
manufacture, packaging.
3. FACTORS INFLUENCING CONSUMER BEHAVIOUR
4. DETERMINANTS OF LUXURY PRODUCT PURCHASE
Clearly, xhuman xdo xnot xalways xbehave xin xlogical xway. xLuxury xgoods xare xgreat xexample xof
xhow xpeople xcan xbecome xout xof xmind. xMany xpeople xare xwilling xto xspend xthousands xof
xdollars xto xbuy xluxury xproducts xwhile xthey xare xable xto xbuy xitems xequivalent xto xgood xquality,
xdurablity xbut xwith xless xcost xtens xto xhundreds xof xtimes. xWhy xthis xis xhappened?
x x x xDefinition xof xluxury xis xoften xindividualized xand xamorphous, xbecause xit xdepends xon xthe
xperception, xaesthetics, xliving xstandards xand xlife xexperiences xof xeach xperson. xBut xthere xare
xstill xsome xgeneral xcharacteristics xthat xhave xbeen xrecognized xthat xluxury xproducts xor xservices
xmust xbe xowned. xLuxury xproducts xare xoften xconsidered xas xhigher xquality, xexclusive, xunique
xor xown xcomforts xor xfeatures xsuperior.
1. xBuying xluxury xproducts xmake xpeople xmore xconfident.

x x x xIn xa xsmall xresearch xof xThe xSocial xPsychology xjournal xshows: xConfidence xis xan ximportant
xfactor xin xthe xcustomer’s xdecision xto xown xa xluxury xitems xor xnot. xFor xgroups xof xconsumers
xwith xlow xincome, xowning xa xluxury xitem xthat xcan xhelp xthem ximprove xtheir xself-esteem xand
xconfidence xwhen xin xcontact xwith xpeople xaround. xor xthose xwho xare xstuck xin xdifficult xfinancial
xsituation xor xjust xmake xenough xto xeat, xthen xowning xa xluxury xitem xwould xbe xa xway xto xhelp
xthem xfeel xmore xconfident. xFor xexample, xin xChina, xmen xuse xluxury xgoods xto xshow xtheir
xsuccess xand xostentatious xwealth, xand xChinese xwomen, xlike xAmerican xwomen, xtend xto xbuy
xluxury xgoods xto xfeel xoptimistic.
2. xBuying xluxury xproducts xis xa xway xto xexpress xtheir xown xpersonal xstyles, xpersonalities xand
xclass xaffirmation
x x x xSome xpeople xare xwilling xto xspend xlarge xamounts xof xmoney xto xshow xoff xtheir xsuccess.
xWhen xyou xearn xmoney, xthe xdemand xfor xclass xaffirmation xappears. xBut xafter xa xwhile, xwhen
xyou xhave xgrown xmore, xthis xstriking xdemand xwill xdisappear. xEconomic xtheory xshows xthat xthe
xdemand xfor xsome xcommodities xincreases xas xprices xgo xdown. xConversely, xa xluxury xitem xwill
xsell xmore xwhen xthe xprice xis xpushed xbecause xof xits xexclusive xnature. xSociety xhas xestablished
xa xgeneral xprinciple xthat xthe xpurchase xability xequate xwith xan xindividual's xposition. xIf xyou
xhave xa xcar xthat xis xmore xexpensive xthan xthe xneighbor, xthen xI xhave xwon xand xmy xposition xis
xhigher xthan xthem. xThis xis xthe xpopular xpsychology xof xnature xand xsometimes, xthe xinsiders
xthemselves xdo xnot xnotice. xResearchers xat xYale-America xUniversity xhave xdetermined xthat:
xfinding xand xpossessing xluxury xproducts xto xaffirm xclass xthat xgrows xfrom xeach xperson's
xchildhood. xResearch xis xdone xfor xa xgroup xof xchildren, xin xwhich xresearchers xtry xto xconvince
xchildren xthat xa xplant xhas xproduced xa xseries xof xfavorite xproducts, xresulting xin xmost xof xthem
xrefuse xto xreceive xidentical xcopies. xFrom xthat xend xwe xcan xpartly xconclude: xThe xpride xcomes
xfrom xowning xa xluxury xand xgenuine xitem. xAnd xthat's xwhy, xpeople xare xalways xsearching xfor
xexclusive xitems, xauthentic xluxury xproducts. xThere xare xmany xreasons xfor xus xto xown xa xluxury
xbrand xof xgoods. xBut, xall xare xrelated xto xthe xstrong xemotions xthat xwe xattach xto xthe xpremium
xmaterials. xWhether xthere xis xfinancial xcomfort, xwhen xowning xa xluxury xitem xwe xall xget
xadmiration xfrom xothers, xor xcan xconsider xit xto xreward xourselves xand xbe xan xachievement.
3. xLuxury xproducts xhave xhigher xquality, xreliability xand xdurability.
x x x xThe xquality xof xluxury xproducts xare xguaranteed xby xusing xtop xmaterials xand xmeticulous
xmachining xprocess. xQuality xis xnot xvariable, xbut xmust xbe xconsistent xand xmore xcomplete
xacross xgenerations. xFor xexample, xto xproduce xa xmale xshoes xMade xin xItaly, xmanufacturer xmust
xuse xFull-aniline xveal xskin, xthis xskin xtype xalways xbrings xa xshiny xouter xsurface, xsoft xand
xsmooth. xAnd xto xchoose xthe xperfect xskin, xpeople xhave xto xleave xa xlot xof xother xparts xof xthe xcalf
xskin. xIn xother xwords, xneither xcalf xskin xis xused xnor xall xparts xon xa xveal xskin xare xused. xFor xthe
xusual xshoes, xto xsave xmaterial, xpeople xoften xuse xleather xpieces xto xstitch xtogether xand xhide
xseams xin xthe xsole. xFor xmen's xleather xshoes xMade xin xItaly, xthe xskin xis xalways xa xpiece xcut xout
xand xthen xcladding xto xthe xshoe xbefore xstitching, xensuring xthe xdurability xof xthe xfinal xproduct.

xThe xluxury xbranded xproducts xnot xonly xleave xa xstrong ximpression xfor xfashion xfollowers xright
xfrom xthe xlaunch, xbut xalso xhelp xto xincrease xthe xattractiveness xand xvalue xof xtheir xuse xover
xtime. xWith xsimple xstyling, xexquisite, xyou xcan xuse xthem xfor x10 xyears, x20 xyears xor xeven
xtransmitted xthrough xgenerations xand xnot xfade xvalue xand xnever xout xof xfashion.
4. xFinding xnew xexperiences
x x x xIt's xnot xmerely xowning xa xluxury xbranded xitem, xbut xit xalso xgives xusers xnew xexperiences.
xPreviously, xmost xfashionistas xmale xowns xthe xhigh-end xproducts xwill xfocus xon xfour xkey
xbenefits, xincluding: xfunction x(including xthe xdesign xand xworkmanship xof xartisans xskilled)
xemotions x(how xthey xchoose xand xuse xproducts), xpersonalization x(how xto xassert xthrough xthe
xuse xof xproducts xbranded xluxury) xand xSocial x(they xcan xbuild xrelationships xhow xthe xsocial
xpartners xwhen xusing xbranded xproducts). xHowever, xa xnew xstudy xby xresearch xfirm xMarket x-
xAgility xbelieve: xExperience x(the xnew xthings xthey xdiscovered xwhen xusing xthe xproduct) xis
xbecoming xa xfactor xgreatly xaffect xthe xdecision xprocess xconsumer xpurchases. xConsumers,
xespecially xwealthy xpeople, xbesides xexperiencing xthe xuse xof xhigh-class xmaterials, xthey xnow
xwant xto xlook xfor xmore xunique xexperiences xassociated xwith xthe xbrand, xthen xpost xthose xspecial
xmoments xto xtheir xsocial xmedia xaccounts.
5.Loving famous brand
Vietnamse people often love famous brands, especially famous brands in the world such as
Gucci, Channel, Louis Vuitton, SYL, Jimmy Choo,etc,…Owning products from famous
brand has become the dream of many fashionistas all over the world. Not only is the trend, the
model, people want to own them by brand value. No matter how you enter a shop named the
top brand is also rare to find a product priced under $ 1000 (equivalent to 23 million VND). In
Vietnam, there are amny artists who possess not only a few bags watches or shoes. But in
order to list the "banging box", it is now famous as Ngoc Trinh, who is recently Si Thanh.
Let's take the example of the Apple Corporation. Consumers camping overnight, waiting to
buy a new product and have incredible loyalty with this company even if Macbooks and
iPhones are not quite unique in terms of technology or possesses superior features. In fact,
there are Samsung phones with better features, and Microsoft Corporation and Xiaomi make
these products at much cheaper prices. However, Apple continues to break record sales year
after year.
6. Buying luxury products make consumers feel happy.
People splurge on luxury goods because they think it will make them happy. Norton, author
of Happy Money: The Science of Spending Happier, said that happiness you get from
spending money depends on how you spend and not necessarily how much.
7. Consumers are optimistic by income improvement
Confidence of Vietnam consumers are strengthened by their optimism about personal
financial prospects in the future (occupation, income). According to research by Nielsen in the
quarter 4-2016, among the largest country in Southeast Asia, Vietnam is the highest

proportion of consumers who feel their personal financial situation will be improved in the
future, at 81%. This optimiser is stimulating people to spend instead of saving.
5. DETERMINANTS OF COUNTERFEIT LUXURY PRODUCT
PURCHASE
Counterfeit luxury product fakes luxury product but are sold at a cheaper price to hit
consumer greed and maybe are sold at or above the price of luxury products to pretend these
products are authentic. Counterfeit luxury products are presented everywhere, from the
sidewalk to the store. At the store, these products are presented under the beautiful light or
located in online stores as the name of a hand goods which is apparently portable but still
counterfeit because it is counterfeit abroad. Because not only in Asia there are the great fake
factories, which in Europe are also many, typically in Italy and Turkey. If counterfeit goods
made in China were still crude by the fact that their workers were not ingenious, the
counterfeit goods made in Italy or Turkey were extremely sophisticated. People use all means
to turn fake into real. Few people can boast that they distinguish from counterfeit luxury
goods and luxury goods, because the only way to differentiate is to have to use through the
goods.
1. Consumers do not afford money to buy luxury goods but still want to have products from
famous brands or like design of famous brands
Some people think that products which they use just 1-2 times but they have to spend a lot
of money are not worth. Therefore, they use counterfeit items, sewing skirt for saving, if do
not use so can throw away. That's why the clones are still on the market, many people know
still use. They don't have enough money to own products from well-known brands in the
world but because they love the famous fashion brands and their styling, choosing couterfeit
items is the solution.
2. Sellers fools consumers into thinking these products are luxury products.
More and more counterfeit luxury products appears in market and become so real. If we
just look, we certainly can not distinguish. Some people recognize that it is difficult to
distinguish counterfeit luxury goods and luxury goods if do not have signs or methods. There
are people who are fooled to buy counterfeit luxury goods at the price of the authentic goods
and they absolutely do not know by trusting the seller.
The methods and tricks of people who violate the ecommerce business are increasingly
sophisticated, buyers are difficult to delocate fake such as: no warehouse or shop that only
receives online bookings; Dispersing of many places, delivery in small quantities of goods;
Sales by intermediate collaborators; Goods without invoice documents and require customers
to deposit, payment via intermediate, even skillfully entice customers to pay out new
shipments... These tricks are not new but still easy to cause customers to “trap” due to loss of
vigilances.
3. Consumers feel that luxury products just have the same quality with counterfeit luxury

products.
Many people believe that the quality of luxury products actually less than compared to
what they are advertising and they just sell “branding” and not invest to quality of products.
Many people think that strong brand associated with excellent quality. Partly do not true. A
handbag design, material, seam exactly a bag LV (Louis Vuitton), even higher quality, but
named a brand strange, or no brand, will certainly have much lower price than the LV bags.
And many other brand names to market the product quality is not necessarily superior, but
still sold at a price superior. Conversely many brands following much better products, but
consumers still refuse to buy, whether it's lower price. That's because the brand not only has
functional benefits (such as durable, strong, versatile ...), but more importantly, with the
emotional benefits (luxurious, elegant ...). Customers buy products LV can not attach much
importance to quality (good material, durable ...) but largely because of pride, because pride is
carries a high fashion brand level, is famous. Benefits emotions sometimes more important
role functional benefits. A car not because it's expensive it's healthy or reliable, but because it
gives users the feeling of happiness, pride themselves become luxury, others admiration…
Also so many people are willing to buy the products with famous brand knowing that product
quality is not necessarily.
4. ySaving ymoney yfor yothers y
y y y yWhen yyou ybuy ysomething, ywe ytend yto ycompare ythem. yAlthough ywant yto ychoose yexpensive
yproduct, ybut yyou ydecide yto ybuy, ywe ybuy ythe ycheaper yproduct. yThis ycoming yfrom ythe ysavings,
ybecause ythe yprice ydifference yis ynot ylarge, ybut yworth ymuch ydifference, ywe ywill ychoose ythe
ycheap ystuff yto ysave ycosts y- ysomething ythat ythe ywhole yworld yrecommend yeveryone yshould ydo.
5. yAlways ywant yto ybe yon ytrend. y y
y y y yIn ythe ymodern yworld, ythings ychange yso yfast. yWill yyou ydare yto yspend ymoney yto ybuy ya
yjacket y10 ymillion ywithout yworrying ythat yit ywill ybe yout yof yfashion ynext yyear? yAlthough
yundoubtedly ythere ywill ybe ymore ydurable yshirt, ygenuine ythan ywhen yyou ybuy, ybut ynext yyear
yyou ystill yhave yto ychange yit yto ycatch ythe ytrend. yIt yis ythe ydesire yto ybe yinclusive yof ypeople,
ymany ypeople ylike yto ylive yup yto ythe ycrowd, ydo ylike yeveryone yand yto ybe yon ytrends. yThat yis
ywhy ymany ypeople ylike ywatching ythe yexpensive ystuff ybut yultimately ybuy ycheap ythings.
6. yPeople yaround ydo ynot yhave yprejudice ywith ycounterfeit yluxury yproducts
y y y yThey ybought yfake yitems ybecause ythe ypeople yaround ythem yalso yused ycounterfeit ygoods yand
ythey yfelt ynormal yto yuse ycounterfeit ygoods. yThey yaccept ythe yfact ythat ythey ydon't yhave yenough
ymoney yto ybuy ythe yitems yand ythey're ywilling yto yadmit yit.
6. NEGATIVE EFFECTS OF COUNTERFEIT LUXURY PRODUCTS
1. To consumers
Consumers are the direct object and was damaged in many aspects from the purchase and
use of counterfeit goods.
+ Economic losses due to buy counterfeit luxury goods

+ Make consumers lose their reliability in the product because they do not find the true
value they need
+ Causing damage to property, health and life of consumers when buying counterfeit goods
because it is not a safe product, not quality with pharmaceutical products, food, cosmetics
2. To business
+ Enterprise lost market share, impact significantly on the profitability of the
manufacturing enterprise, righterous business by counterfeit goods which has cheated
consumers with lower price
+ Large business lose reliablity with customers
+ The business environment is compromised
3. To state
+ Counterfeit luxury goods have negative impact on healthy competitive environment and
attracting investment to the social-economic development, especially to attract foreign
investment and make the commitments on intellectual property
+ Lossess state budget
+ Lossess state tax
+ Morality is spoiled from the unrighteous currency
III) FINDINGS
Carry out a survey in which 100 Vietnamese people will be chosen randomly to perform a
questionaire
Aim
- to have a general view of the level in which Vietnamese people show their interest and the
reasons why they choose to buy luxury products and counterfeit luxury products.
30%
70%
GENDER
Male
Female
The chart shows the participation rates of people in filling in survey about consumer

behavior toward luxury and counterfeit luxury products in Vietnam by gender.
10%
80%
8%
2%
AGE
Less than 18
18-25 years
25-35 years
35 or more
The pie chart shows the percentage of people who joining the survey based on their age.
Clothes
10%
Handbags
5%
Cosmetics
18%
Accessories
10%
Home Equipment
5%
Watch
1%
Technological Devices
20%
Perfume
8%
Food
1%
Cars
0%
Shoes
23%
LUXURY PRODUCTS THAT YOU HAVE BOUGHT
Based on the pie chart, we can clearly seen that favorite luxury products including
1. Shoes (23%)
2. Technological Devices (20%)
3. Cosmetics (18%)
4. Accessories (10%)
5. Clothes (10%)
6. Perfume (8%)
7. Home equipment (5%)
8. Handbags (5%)
9. Watches (1%)

Clothes
17%
Handbags
17%
Accessories
8%
Watch
8%
Technological Devices
8%
Perfume
4%
Shoes
38%
COUNTERFEIT LUXURY PRODUCTS THAT YOU
HAVE BOUGHT
Based on the pie chart, we can clearly seen that favorite luxury products including
1. Shoes (38%)
2. Clothes (17%)
3. Handbags (17%)
4. Technological Devices (8%)
5. Accessories (8%)
6. Watches (8%)
7. Perfume (8%)
IV) SAMPLES
1. Luxury goods

2. Counterfeit luxury goods

V) CONCLUSION
Young people who have no income or who are low income tend to buy counterfei luxury
goods, while those who have a solid career tend to buy expensive items. However,
Vietnamese people can buy counterfeit luxury goods such as clothes, shoes,etc,…, while self-
care items tend to buy luxury products. In particular, shoes are the most popular Vietnamese
luxury products and also the most Vietnamese counterfeit products
The issue for counterfeit luxury goods is the job of not only an organization or individual
that must be the work of the whole society, but in the first place businesses need to protect
themselves, consumers need more information in assessment and selection of products , have
appropriate action. It is necessary to complete the provisions of the law, coordinate more
closely between law enforcement agencies, improve the consciousness of the organization and
the individual. Having done so is to gradually push back the issue of counterfeit goods,
counterfeit goods and poor quality are spilling today. Vietnam's Intellectual Property Law
also stipulates that this is not only a right but also a responsibility of businesses in
coordinating and cooperating with law enforcement agencies. The alliance among
manufacturers in the fight against counterfeiting should be more active. Enterprises must not
be lax in managing and supervising the consumption of their goods, and should not consider
the anti-counterfeiting to be of law enforcement agencies. When the trademark is infringed,
the owner should proactively submit a complaint or through the anti-counterfeiting and
trademark protection agency. Finally, be a business that is smart and responsible, as
consumers are smart consumers.

VI) REFERENCES
1.Vietnaminsider.com
Vietnamese consumers spend big on luxury goods < https://vietnaminsider.vn/vietnamese-
consumers-spend-big-on-luxury-goods/>
2. Luxury Market in Vietnam <
https://www.academia.edu/40491588/Luxury_Market_in_Vietnam_An_emerging_market_in
_prospect>
3. Vietnam consumer trends: Shifting Tastes <
http://ftp2.ssi.com.vn/Customers/Research/2018/Sector_Report/Vietnam_Consumer_Trends_
Shifting_Tastes_20180627.pdf>
4. Appetie for Luxury in Vietnam: A lucrative Market for High- End Products <
https://www.vietnam-briefing.com/news/appetite-luxury-vietnam-lucrative-market-highend-
products.html/>