Anti Piracy
& Anti Counterfeit Blog

Why are mid-range products experiencing market growth?

Posted by Laura Urquizu on Tuesday, Apr 18, 2017

We look at why consumers are gradually buying more mid-range products, and how the counterfeit industry is responding.

the-growth-of-mid-range-products.png

In the 1980’s, the European watch industry was facing a crisis. Traditionally-mechanical Swiss watches were unable to compete with competition from low-priced quartz watches from Asia, and companies lacked structure and innovation in response to the changing market.

Enter Nicolas Hayek, a Lebanese consultant, who was asked to analyse the flagging industry. Hayek impressed executives so much that he was swiftly appointed CEO and chairman of Swiss watch company Swatch. Hayek began by competing with the low-end market, mass-manufacturing a plastic watch that made an affordable statement, and enjoyed unprecedented success in European markets. Gradually Hayek, with a focus on abandoning tradition for innovation, began to roll out watches that would take on the higher end of the market, under separate companies such as Omega. Today, Swatch continues to be a market leader in watches, with its eponymous brand focusing on mid-range products.

<<Free Ebook: How to select a brand protection solution>>

Swatch’s emphasis on market awareness is an important lesson, and equally a middle-of-the-market fixation is arguably prudent today. As Hayek foresaw, an emphasis on lower-range products can be a gateway toward cultivating consumer loyalty, but additionally a multitude of industries tend towards growth in mid-range products. While 2016 saw sales of top-of-the-range Swiss watches plummet, lower-priced watches experienced new strengths, driven by changing consumer habits.

The ‘mass cool’ segment, which offers products of affordable luxury aimed at millennial consumers, is experiencing a rapid growth. Entrepreneurs are beginning the recognise the gap in the market, with companies in the sunglasses sector such as Hawkers, Italia Independent and Warby Parker rolling out products affordably priced at US $100 or under, to great success. The sunglasses sector was historically dominated either by luxury Luxottica frames or by low-end unbranded products, but as the market shows a strong response to mid-range products, the changing face of consumer habits is made evident.

However, mid-range products face an unprecedented vulnerability in the evolving market. E-commerce, too, has changed buying habits with over 1 billion online buyers, and the online dominion demands that companies sell through online channels such as Amazon, eBay and Alibaba. However the platforms, which connect sellers and buyers across the globe, have a major problem with counterfeits.

Unfortunately, it is evident that smaller businesses are the most impacted by the global counterfeit market, as luxury brands are globally-recognised and fake products often easy to spot. Emerging brands, by contrast, must fight to establish themselves, and many have faced extensive damage following a high prevalence of counterfeits on Amazon and Alibaba.

Despite the e-commerce platforms making efforts to counter the practice, problems with counterfeiting continue, and startup and smaller companies more than ever are required to make conscious actions toward protecting their brand and image online. The alternative, namely to not pursue e-commerce sales, is to ignore the profitable dominion held over sales, marketing and distribution in the digital age. In proposing a brand protection strategy, it is advisable for companies to review strategies from brands that do anti-counterfeiting right, as well as staying educated on how counterfeiters work and new means of selling. There are different routes in brand protection, and every company must judge for themselves how to best protect their brand in view of their level of counterfeit online.

New Call-to-action

About the author

Laura Urquizu

Post Written by Laura Urquizu

Red Points' CEO Laura Urquizu has over 20 years experience as an executive and board director in banking, venture capital and startups. She has worked with companies like Arthur Andersen, Caja Navarra, Corporación CAN and Inspirit. Laura is a respected expert in the startup field and innovation-based businesses.