Social status is as much important and significant in the West as in other societies. Designer clothes, fancy cars, fancy watches are all used to signal that you belong (or you pretend to belong) to a certain social class, just like the way you talk or the way you behave.
As to why some people who clearly cannot afford these would buy counterfeit goods or (more frequently in the West, accumulate excessive debts to pay them), I assume there is the desire to belong (or appear to belong) to said social class, coupled with the fact that appearance very much matters in our society and people are judged every day based on their appearance rather than their skills or their characters. That judgment can result in better job, promotions, better sexual partner, better social accceptance.
Now, multiply that tenfold for poorer countries.
In the west I don't see nearly as much (well, I'm in the UK to be precise) and don't actually see it so much in others. But what I do see puzzles me.
But thanks for a solid perspective.