Understanding the
"Fake Watches" counterfeiting industry

How counterfeiters can manufacture
fake Rolex, Audemars Piguet… watches

“The production of fakes raises a swirl of questions. I often get requests from Internet users, students, journalists or various watch enthusiasts who want to know where the factories making all these counterfeit watches are hidden.” 

It is impossible to put a figure on the number of counterfeit horological products that have been sold in the past few years. To do so would require an estimate of the number of units actually produced, but unfortunately making fakes is an activity over which there is not much control. Nevertheless, there are indications that the 2005 production figure of around 40 million fakes a year has been steadily increasing since. Guesses as to the exact number of fake watches produced a year and revenues from counterfeiting vary somewhat according to the sources able to provide information on the subject. The figures are thus fairly random. By putting together various facts it is nevertheless possible to see that the increase in production is real. Some authorities, notably the Federation of the Swiss Watch Industry (FH), seize increasing numbers of fake watches. This tells us that the market is clearly making net progress. For example, the investigative branch of the FH has set up coordination with the authorities in Dubai. A total of 90,000 fakes were confiscated in the city in 2013 alone. Add the fakes that got away and multiply that by the number of countries and cities that have become notorious as counterfeit distribution centers, and it is easy to conclude that this is a flourishing market where tens of millions of fakes are disposed of.

However, assessing these figures and calculating others is not the purpose of this article. The profit shortfall occasioned by this fraudulent trade is mainly a matter for the brands. As for the direct consumers, they are far more interested in finding out how to avoid having fake watches on their wrists.

Assets deployed by counterfeiters.

The production of fakes raises a swirl of questions. I often get requests from Internet users, students, journalists or various watch enthusiasts who want to know where the factories making all these counterfeit watches are hidden. Some are led to believe that such places exist. It is evidently a hidden production system, secretive enough not to have their signs hanging out on the high street.

The best way of tackling the problem is from the production side.

Let’s start with the production of original watches in a manufacturing company in which all or some of the production is integrated. The components are designed and produced by the company. As a result, it controls virtually all the production on its premises. It is important to remember that not many watch companies are capable of this.

Most watch producing companies commission sub-contractors for a good number of the production-line operations. These contractors, specialized in making watchcases, dials, hands and even entire movements, supply the parts so that the watch company can complete the assembly of the watch and undertake various quality checks.

These suppliers produce components of excellent quality according to the strict criteria that meet the demands of luxury watchmaking. After all, your timepiece consists of the sum of its parts, each immaculately finished.

The standard demanded by the brand makes the difference. If a watch is to be sold for tens of thousands of dollars, the movement, case and dial have to be of commensurate quality. If the consumer is paying less than 1,000 dollars for a watch, its quality is necessarily inferior. It is therefore thanks to the skills and excellent workmanship of these suppliers that the specifications set by the watch manufacturers can be met.

The same applies to the production of fake watches. A factory in Asia producing millions of watchcases a year for hundreds of clients, will accept any order provided the specifications are clear and the bills are paid. It will not spend a moment thinking about whether there is any reason to consider some trifling issue involving intellectual property. By that I mean there will be no investigation by any legal department into the ownership or the patents of the components to be produced. Nor will the factory study the features of every branded watch to find out whether its client’s manufacturing blueprints have not already been patented. It will produce the case and do so in quantity, making tens of thousands of copies for the client. The same applies to the entire production line.

Let’s now turn to China and the production of horological parts coming out of that country. Take the example of the production line of a fake watch. The original watch is fitted with a case in high-grade steel. The counterfeiter will order an identical case and do the same for all the constituent parts of the original watch. So far as the movement is concerned, let us suppose that the original watch is fitted with an ETA selfwinding movement. It too will be taken apart and its constituent parts copied.

It is only when all the parts needed to assemble a watch have been produced that the counterfeiter can embark on stage one of his business. He will therefore have the watches assembled and will concentrate on making them identical to the original, going so far as to copy the brand’s hallmarks, screen printing and engravings while adding false serial numbers. From this moment on he is acting illegally with intent to commit a straightforward fraud.

In order to dismiss any stereotypes, it must be said that it would be unthinkable for a Chinese businessman with a registered business wishing to establish himself in the watchmaking industry to have in his business plan the creation of an Internet site for the sale and distribution of fake watches.

Let’s take the watchcase for example. If you are the lucky owner of a Swiss Made watch, you will notice that the serial number will certainly be on the case. On a Rolex watch it is between the lugs of the case or on the flange in the latest models. On the watches of other makers, the number is engraved on the back of the watch or on the screw caseback. You will notice that in most of the watches the serial number is properly cut into the metal with a resulting relief denoting a quality marking.

This stage is more difficult for counterfeiters because it needs qualified and precise workmanship, while it is often carried out by clandestine workers by hand. As a result, I found fake Rolexes engraved between the lugs with a spelling mistake: “ REGISTED” instead of “REGISTERED”.

As for the engravings on the back of the watch, such as the serial number or the number of a limited-edition watch, you will notice that they are very often not cut into the metal, but simply inscribed with a laser. It looks as if the engraving is on the surface rather than in depth. The same goes for the stamping of the dial. In an original watch, a lens reveals that it is correctly made with enough relief to avoid deformed letters.

It is quite different on dials made for counterfeit watches.

However, we should not be too dismissive on these points because we could, in the future, be unpleasantly surprised by the improvement in quality and the determination of the counterfeiters to persist in their fraudulent activity. They constitute a competitive element that now takes a substantial share of the market. The fact that such horological complications as the tourbillon or perpetual calendars are emerging onto this parallel market, leads to the conclusion that their determination is not running out of steam.