Illicit trade in counterfeit goods that infringe on South Korean intellectual property rights amounted to $9.7 billion annually, according to an OECD report on July 5. More than half of such counterfeit products are electronic devices such as mobile phones, TVs, headphones and chargers, with the majority of counterfeit goods originating from Hong Kong and China.
The OECD released a report titled ‘Illicit Trade and the Korean Economy’ on July 3, at the request of the Korean Intellectual Property Office. This is the first time the OECD analyzed the impact of counterfeit products on the South Korean economy.
In 2021, the total value of world trade in fake goods that infringed Korean intellectual property rights amounted to $9.7 billion, or 11 trillion won. This is equivalen to 1.7% of Korea’s total exports.
Among goods violating Korean intellectual property rights in 2020 and 2021, electronics (51%) were the most targeted. Other Korean products commonly faked include textiles and clothing (20%), cosmetics (15%), miscellaneous goods (6%), and toys and games (5%). The primary sources of counterfeit goods were Hong Kong (69%) and China (17%).
The OECD said global trade in counterfeit goods led to declining sales and jobs for South Korean companies. The total sales Korean companies lost due to trade in counterfeit goods amounted to $6.1 billion in 2021, representing 0.6% of total sales in the manufacturing sector. Consequently, 13,855 manufacturing jobs were lost. The electronics, home appliances and telecommunications sectors were particularly hard hit, with sales losses adding up to $3.6 billion, along with 9,500 job losses.
