Fa(K)e-Way: Counterfeiters are targeting Cape Union Mart’s iconic K-Way

As South Africa’s illicit economy shows no sign of slowing down, outdoor apparel brand Cape Union Mart is facing what many retail brands fear the most: the proliferation of counterfeit products.

For Cape Union Mart, around since 1933, it is the illicit sale of its iconic brand, K-Way, that is most pronounced.

The group, owned by the Krawitz family and led by its patriarch, Phillip, told Business Day that K-Way counterfeiters attempt to capitalise on the brand’s recognisability and consumer trust.

“They say that imitation is the sincerest form of flattery, but the reverse is true when the true cost of counterfeit retail is calculated,” said Martine Vogelman, director of strategic brands for Cape Union Mart.

“South Africa’s illicit goods industry is estimated to cost the local economy billions of rand, but it’s impossible to put a price on the damage it can cause to legitimate retailers.”

K-Way puffer jackets, softshell jackets and beanies are particularly vulnerable to imitation with black market players cashing in on their reputation.

Cape Union Mart operates more than 200 stores nationally, with brands such as Old Khaki and Poetry part of the stable. The privately held company took the K-Way brand to market in 1981.

The illicit economy gobbles up to R700bn of GDP annually, according to data from the South African Revenue Service (Sars), which says the cost of this to the fiscus is R100bn.

Sars has identified dismantling criminal syndicates behind the illicit economy as a priority, as has President Cyril Ramaphosa, who earlier this year established a National Illicit Economy Disruption Programme, bringing together state agencies and other stakeholders, including the private sector, in response to the threat posed by the infiltration of illegal and counterfeit goods to South African jobs and industry.

South Africa’s legal cigarette market has been hollowed out by the black market, which now accounts for more than 70% of the market, forcing British American Tobacco to cease manufacturing in South Africa and opt for an import model to service the domestic market.

For Cape Union Mart, its experience tells it that counterfeit products thrive on two pillars: consumers who knowingly purchase the illicit goods and those who are duped into buying what they believe are legitimate products.

Vogelman said counterfeits of its products are often peddled through informal traders and market stalls and increasingly through third-party e-commerce platforms and social media marketplaces.

“There’s very little we can do to protect consumers who are willing to sacrifice quality and authenticity for a cheaper price tag, but it’s the unsuspecting buyer that creates the greatest reputational risk for brands,” Vogelman said.

“However, the impact of counterfeit retail extends beyond lost revenue and reputational harm. It also threatens the livelihoods of hardworking employees — a particularly significant concern for the Cape Union Mart Group, which manufactures K-Way products locally in Cape Town and employs more than 900 people across its manufacturing and distribution operations.”