Industry Insights

Counterfeit Trading in a Top Global Business Hub: the UAE

One third of UAE citizens occasionally buy counterfeit luxury goods

The United Arab Emirates (UAE) represents an important global trading hub for at least three reasons. First of all, the country’s geographic location makes it a gateway to the Middle East and a transit point to other markets, such as Africa and Europe. Secondly, the UAE economy is going through a process of diversification as the Gulf state works towards reducing its dependence on oil and gas resources. Thirdly, the UAE not only continues to show openness to international business, but is host to a large number of Free Trade Zones (FTZ), where imports are exempted from taxation.

With these significant trading opportunities, however, come downsides, particularly in the shape of widely available counterfeit products on the market. This ease of access to counterfeits is combined with a high demand by UAE citizens for fake items, in particular luxury goods. Even though the UAE is considered a rich country, with citizens enjoying one of the world’s highest per capita incomes, researchers estimate that one third of UAE citizens occasionally buy counterfeit luxury goods.

According to a study conducted by Paris Sorbonne University Abu Dhabi, Emiratis do not perceive any legal or financial risk when purchasing fake items. On the other hand, they do perceive significant psychosocial risks (feelings of shame and guilt about buying counterfeit goods), as well as risks pertaining to the performance of poorer quality counterfeits. To address these risks, citizens have developed coping strategies that include selecting only the best counterfeit products or favouring copies of recently released or limited-edition goods that are less familiar to the general public. The study also revealed that Emiratis “buy counterfeit items, particularly because they are large buyers of luxury goods” and that the rising number of collections launched by luxury brands “could increase demand for genuine products as much as for counterfeit goods.”

In addition to buying counterfeit goods in physical markets, and in line with a worldwide shift to online shopping, accelerated by the COVID-19 pandemic, the number of UAE internet users ordering items online increased from 27% in 2019 to 63% in 2020. Along with this increase came a corresponding increase in online counterfeit purchases, including fake medicines, a multitude of which sprang up for sale online during this period.

UAE Seizures by Product Category

Dubai’s notorious counterfeit markets

Against this favourable backdrop for the proliferation of counterfeit goods, and despite the enforcement efforts of Dubai Customs and other authorities, a significant amount of counterfeits are available for purchase across the UAE in general, and Dubai in particular, with importers and exporters often going the extra mile to conceal the origin and quality of their goods.

Two of Dubai’s most notorious markets for counterfeit products are found in the districts of Deira and Al-Karama. Located on the eastern periphery of Dubai, Deira is home to several markets for products such as perfume, gold, and spices. Across from Deira, on the opposite side of Dubai Creek, is Al-Karama, with the Old Karama market specializing in bags, sports equipment, and sunglasses, as well as other areas selling products such as cosmetics, watches, clothes, and cell phones.

The widespread presence of counterfeits in these districts, in particular, represent important risks for brand owners, given that these areas are frequented by millions of tourists and locals alike. Such risks include damage to a brand’s reputation and a reduced demand for original goods, which subsequently leads to decreased revenues. Moreover, the more popular a brand becomes, the more likely it is for the brand owner to face IP-infringing problems.

UAE Seizures by Origin Country

Measures to combat counterfeits

The measures employed by Emirati authorities to combat counterfeit products in the market comprise customs seizures, coordinated police raids and expanded cooperation with stakeholders such as brand owners and diplomatic missions. In 2021, the Intellectual Property Rights (IPR) Department at Dubai Customs announced that during the first nine months of the year, the authorities thwarted 2,669 attempts to introduce counterfeit products in the country, a sharp increase compared to the same period in 2020 when 1,715 such actions were registered. In just one case alone, the customs identified a shipment containing over 17,200 packs of fake Vaseline petroleum jelly.

Moreover, in 2021, 390 IP disputes were resolved and more than 2 million counterfeit goods for 221 trademarks were recycled. In comparison, in 2022, Dubai Customs announced a total of 2,147 seizures, while dealing with 388 IP disputes.

At the same time, the government organized 93 recycling operations, targeting 173,000 counterfeit items. In one such action, in November 2022, the IPR Department recycled over 22,000 counterfeit goods for 24 brands from several countries, such as Germany, Italy, and the United States. The products included watches, phones, bags, shoes, and cosmetics.

UAE Seizures by Mode of Transport

The Emirati authorities also organize raids to confiscate counterfeit items. In February 2023, the Dubai Anti-Economic Crimes Department confiscated fake watches from 17 brands, including Rolex and Patek Philippe, after receiving a complaint in this regard from the Federation of the Swiss Watch Industry. Furthermore, Dubai Customs organized, in 2022, a series of meetings and conferences to expand cooperation in the field of intellectual property rights protection and registered a total of 231 trademarks by December.

To conclude, the United Arab Emirates in general, and Dubai, in particular, represent major transit hubs and are thus targeted by traders in counterfeit products. Whether these products are meant for internal commerce or for further export to other countries, customs authorities annually confiscate goods worth millions of dollars.

However, despite intensifying seizures and raids, IP-infringing items end up being available for purchase, particularly in the notorious areas of Dubai such as Deira or Al-Karama. The categories of goods on offer range from watches, bags, and perfumes, to life-threatening medicines that pose serious health risks to the population.

Get your free UAE Supply Chain Intelligence Report

ApiraSol is able to quickly map shipments of trusted and suspicious products entering and leaving UAE. Send us a short request and we will get back to you very quickly with an interactive map. Just let us know the brand you want to monitor.

Disclaimer: this free demo proposal is only valid for brand owners and for requests done using your corporate email address.

Your message has been submitted.
We will get back to you as soon as possible.
Oops! Something went wrong.