LEGO entangled in sale of counterfeit toy sets in Singapore

LEGO is currently caught up with the issue of its counterfeit sets being sold at a local retail store and e-commerce sites. The counterfeit sets feature toys which look like terrorists from the Islamic State in Iraq and Syria (ISIS), and were on sale at People's Park Centre and Carousell, according to The Straits Times.

Recommended for children aged six to 12, the counterfeit LEGO sets were labelled as "Falcon commando" sets and portrayed violent scenes showing figurines carrying the ISIS flag, firing AK-47s and launching sticks of dynamite, as well as a figurine of a decapitated head, the report said. These sets have been pulled off the shelves. Brick Generals, an online retailer specialising in the customisation of LEGO figurines, was also reported to be selling similar ISIS-themed figurines described as "militants" and "bombers", with one of them known as "ISIS Jihadi John", according to The Straits Times. However, a quick search by Marketing showed no results of the said terrorist LEGO figurines.

In a statement to Marketing, Charlotte Simonsen, senior director, corporate brand communications, said the products are "in no way affiliated with the LEGO Group". They are neither LEGO products nor are the bricks in the set LEGO bricks.

"As a company dedicated to inspire and develop children, we would naturally never make a product like this," Simonsen said. While LEGO declined to comment on the marketing strategies it employs to ensure consumers are not being duped into buying counterfeit goods, Simonsen said it is taking the "necessary steps" to ensure it protects its intellectual rights and consumers.

While Bricks General has not yet responses to Marketing's queries, a spokesperson from Carousell said trust and safety is a top priority for Carousell and it takes prohibited items, including counterfeits, very seriously.

"We are constantly working to improve user features that provide a safe and enjoyable environment for our community to buy, sell and connect with interest groups.  We have also built features for user feedback, user verification, as well as trust and safety guidelines. Dedicated teams at Carousell monitor for suspicious activity, and look into community reports to ensure the quality and safety of our marketplace. Technology enables us to detect unusual user activity and patterns at scale, and we are constantly innovating to improve this capability," he said.

"As a community-focused marketplace, we hope that all Carousell users will abide by our community guidelines to ensure that the marketplace remains safe, friendly and conducive for all," he added.

Carousell's spokesperson also said that while the majority of people have safe and successful transactions online, internet fraud remains an industry-wide challenge around the world. There is a small percentage of anonymous people who do not have good intentions, and list counterfeit items, even fraudulent listings. Carousell will remove such listings whenever it can detect them.

Impact on the LEGO brand

Katie Ewer, strategy director at JKR Singapore, said when it comes to packaging, especially in the FMCG realm, products are product first, and “packaging is category generic”.

“Even though counterfeiting is a problem, brands don’t do enough to build very distinctive packaging that can be own able by the brand itself,” Ewer said. Nonetheless, a brand such as LEGO that actually has very strong brand equity, still has major concerns and problems of counterfeiting, especially in markets like China.

“However, globally, nations are doing more to protect IP and make a stance against counterfeiting. Take for example the Michael Jordan ruling in China last year against "Qiaodan"; a trademark case that was great news for foreign brands in China," Ewer added.

JKR Singapore, as such works closely with clients to build distinctive brand equity that is "own-able" and cannot be copied without infringing copyright. According to Ewer, this is one part of what brands can and should be doing to not just protect themselves, but stand out in a crowded category. The other part is about embracing digital first thinking, technology, and piloting partnerships with tech companies. There are measures that can be put into place to help give consumers confidence in the authenticity and safety of products, Ewer said.

“Commitment to distinctive brand equity and a fast-adopting digital and tech mentality can protect not just brands, but vulnerable consumers too,” she added.

Also weighing in on the statement is Nick Foley, president for Southeast Asia Pacific and Japan for Landor, who said this issue will not have any negative long-term impact on LEGO's reputation, as consumers are savvy enough to see the matter for what it is. He added that it is not the role of companies to raise awareness about counterfeits, but rather the authorities in each country to regulate.