According to a recent report by the Institute of Economic Affairs, the UK’s black market economy is worth approximately £150 billion a year, which is the equivalent of about 10% of our GDP.
Whilst the size of the black market has slowed down over the past 10 years, the pace of this decline has shrunk since the start of the economic crisis, continuing to deprive the Exchequer of billions of pounds in lost revenue.
Recent findings from OMD UK’s nationally representative consumer panel, SnapShots, found that 28% of 720 adults surveyed have knowingly purchased black-market goods in the past.
The most popular illicit item was fake DVD’s, where 16% of respondents reported buying them, followed by other fake items and goods not certified for UK sale (e.g. EU cigarettes) at 11% respectively.
The cash-strapped under-35’s were the group most likely to purchase these black market goods, as they continue to be effected by the economic downturn, which is supported by findings from our Future of Britain study of 2,000 nationally representative respondents.
Our Future of Britain research showed us that the under-35’s were the group most likely to struggle to pay for branded goods (22% agreed) and care more that products are cheap, rather than whether they are sourced ethically (49% agreed).
Fake items are a real worry for the high-street and online retailers. Brands must to continue to engage with consumers to make them understand the real value that brands can add to people’s lives, above and beyond price-led transactions.