Fake goods have existed for as long as there has been demand for the genuine article: from bogus Medieval relics to designer handbags with wonky stitching. And today’s cosmetics market is one of the hardest hit.
“The counterfeit problem in general is huge,” says Mary Kernohan, Head of Nurture at brand protection company SnapDragon, whose proprietary software identifies infringing products and sellers. “A recent report from the OECD [Organisation for Economic Co-operation and Development] revealed that, in 2019, the international trade of counterfeit goods and pirated products amounted to as much as US$464bn, or 2.5% of world trade.
“For cosmetics and personal care in particular, the industry loses around $5.4bn in sales every year due to counterfeits. It is one of the worst hit industries when it comes to fakes.”
Daniel Shapiro, VP of Strategic Partnerships & Brand Relationships at digital revenue recovery firm Red Points, adds: “In recent years we have witnessed a spike of fake websites impersonating cosmetics brands in order to defraud customers. In most cases, unsuspecting consumers will turn to the genuine brand for compensation or to complain.”
The hit to health
“Counterfeit cosmetics are a dangerous part of the fakes market,” comments Detective Sergeant Andrew Masterson from the City of London Police’s Police Intellectual Property Crime Unit (PIPCU).
Part of the issue with fake beauty goods lies in their potential harm to consumer health, as Masterson explains: “The biggest concern around counterfeit cosmetics is that they can harm users, some of whom aren’t aware that they’re buying fake products.”
The inclusion of substances whose use is banned or restricted in cosmetics “can cause skin irritation and, if mixed with other products, react to cause lasting damage”, he adds.