The grey market | Daring Light

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The grey market

From the moment I thought about the business idea of a perfumery and cosmetics shop, there was always one fundamental value, and it was respect.

 

 

Everything behind the grey market in today’s global perfumery.

Respect for art, and for artists’ creations, has always been what has shown me the way forward in my life. I am a lover of different forms of art, and for example in cinema, literature and music, it has always been about acquiring the original item, going to cinemas, fantastic film festivals like Sitges, going to live concerts and not using illegal downloads that infringe intellectual property rights. The bands themselves already collaborate via their own platforms so that you can listen to their albums before you buy them. At least in my personal taste of Black, Death and Doom Metal.

Respect in Daring Light means that the items offered in the shop are authorised by the brands themselves, and their distribution is authorised. I will now explain a little about what the grey market is, and what it means for those of us who want to do things right.

Respect and love, our hallmark for perfumery.

There is a parallel import market or “grey market”, which, although legal under some specific terms, the only thing it does is that the user who buys in this market is harmed rather than benefited. As tempting as it may seem to buy something at a lower price, there are issues to be addressed and taken into account.

Parallel importation already existed in the 19th century, but on an occasional scale. It was at the end of the Second World War that it became more important. Transnational companies emerged and expanded their production and distribution networks, through licensing agreements, which contained territorially restricted clauses. All this leads to the exhaustion of intellectual property rights, which has brought it into conflict with the right to free movement of goods in most of the world’s different markets.

Once a brand is introduced into a particular market, this parallel import has free access to the market and from this point onwards can be subject to further marketing acts at the expense of the principle of freedom of trade. As a result, articles offered to certain markets, with a retail price in line with per capita income, cross those markets authorised in the licensing and distribution agreements, becoming unauthorised distribution by the brand. This parallel importer will then send the goods to new countries, where the same item is officially sold at a higher price because its RRP is higher due to per capita income. But the prices of these “grey” goods will always be well below the RRP in the new country.

A particular brand can legally introduce a series of references in a country of the European Economic Area, and through third parties unrelated to the brand, take them to other countries of the same European Economic Area. This is where the parallel import or grey market comes in. Turning these articles into a line of distribution not authorised by the brand itself. And eliminating any guarantee that a certain article may have.

Trademark infringement, counterfeiting, patents or designs are some of the most common risks. Although the items sold in these sales channels are usually originals, the consumer runs the risk of purchasing a counterfeit item, since the seller is not subject to any control as a distributor of the brand. And the same thing that sells something that was previously original may not be original at a later date. To this, we must add that he cannot guarantee the quality of the product he will sell, since during its acquisition and transport it could undergo modifications or adulterations that damage the quality of the product after it has left the official distribution cycle. This is not the case when the distribution chain is controlled by the brand.

Are perfume brands unprotected in this grey market? 

There is one exception, and that is when an import takes place from outside the European Economic Area to the same European Economic Area.  The manufacturer who owns the trademark will be entitled to stop and prevent such parallel importation. Therefore, although this has been a very controversial issue, case law has concluded that the exhaustion of trade mark rights has a Community dimension and not an international one. 

Resellers of goods take advantage of the advertising, marketing and other expenses incurred by authorised sellers for their own benefit. Furthermore, this praxis is geared towards the sale of perfumes online, exclusively. Well-known shops do no favours to the industry, and to boutiques like Daring Light, who believe in ethical retailing. A physical or official online perfume shop takes care of its image and brand. And we seek, exclusively, that buying perfumes is a satisfaction in all aspects. So much for the tools used, the care in the packaging, the customer service, as well as the courier services.

By purchasing parallel imported goods, the consumer could be purchasing an original and genuine article, which could however have hidden defects that could not be properly replaced as they are not covered by the relevant warranties, the consumer not being aware of such a situation when purchasing the product from the parallel importer. They can also buy items in good condition, but this is a personal matter for the consumer, and their own ethics. 

100% official perfumes and home fragrances and full traceability.

A risk that I, at least for my part at Daring Light, wanted to avoid for my customers.

Brands control which market their products are targeted at, through security controls such as batches, hidden security systems, or hidden purchases from suspicious shops to control which batches they sell. In this way they take care of their image as much as possible. It is common to find these lots crossed out, scratched or removed.

In addition, it is the duty of the official sales outlets to report these acts.

Without further ado, and to conclude, please feel secure in buying at Daring Light, because the origin of each of the articles that you will find is totally official and authorised.

Strength and health!

Sergio Martínez Anaya

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