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Technology, smartphone ownership, and awareness have all played their part in making counterfeiting an effortless and lucrative business.
As counterfeiting and brand abuse continues to negatively impact on e-commerce, we take a closer look at 10 reasons why counterfeits and brand abuse seems to have become an effortless process for those looking to exploit consumers, inflicting untold damage to brands worldwide.
We reveal how internet access, advancements in technology, buyer behavior, and awareness all play their part in making this a widespread and lucrative business.
Brands are a complex thing. They have the power to engage, connect emotionally with the consumer, and influence buyer behavior. Subconsciously we also have feelings towards brands, when we see a logo or an advert, we have an emotional connection, whether that be positive or negative. In fact, 77% of consumers buy from brands which share the same values as they do.
Consumer trust and loyalty in a brand takes time, effort, and resources to establish. Some brands, particularly in fashion are associated with a particular social status and consumers with various disposable incomes want to be seen with the latest and most sought-after items.
This gives cybercriminals a great opportunity, offering goods which appear to be from a certain (sometimes luxury) brand at significantly lower prices they can attract business and drive sales. Business can be attained from those who are actively searching for counterfeit copies, and those that have been tricked by sophisticated scams or lured in by great looking “not to be missed” offers. Either way, this activity is damaging to brand reputation, revenue, and consumer confidence.
Internet speeds, advancements in computer technology, and the emergence and evolution of social networks and digital marketplaces have no doubt provided e-commerce companies greater ways to reach global audiences. Today, there are over 1 billion websites, however just 10 – 15% are considered “active”. New channels to share content, promote products, and above all else propel sales have been welcomed by business and consumers alike.
Whilst these new technologies and channels have had a positive impact providing a 24/7 service, cybercriminals are also utilizing them to imitate brands, abusing intellectual property and making the process of selling fake goods to wide global markets, a simple, low-cost process.
According to recent studies almost 4.57 billion people are considered active internet users across the globe in 2020. This equates to 59% of the global population which has been a big factor in the increased demand for e-commerce shopping. Growth in emerging markets, which has also been boosted by smartphone ownership.
The migration from offline to online shopping has been accelerated by recent, and what looks set to be considerable lifestyle changes due to the global pandemic. Whilst brands and digital channels reposition their offering to adapt and take advantage of these new markets and trends, the opportunity for cybercriminals to increase activity and profit is a real danger which must be taken seriously.
Digital marketplaces and social channels have been focused on enhancing user experience, and monetizing their product offerings, but have not always dedicated enough time and resources to tackling the issue of counterfeits and brand abuse.
Users of popular social networks, and shoppers on the most established global marketplaces believe that the products being advertised and sold must be genuine. It´s this belief that leaves consumers wide-open to the threats associated with interacting with fake profiles or buying counterfeit goods online.
We are hearing more in the media today about the efforts of marketplaces and social networks to tackle piracy and brand abuse, yet there is a long way to go before the issue is under control. Brands must find way to protect their own products and reputation, controlling what is being advertised and sold under their name.
When we hear the term “counterfeit” many of us are likely to imagine a poor, low quality copy that vaguely reflects that of the official item. Well, today this is often not the case. Many counterfeits originate from China and the quality of the materials used, and the advancing production methods used to replicate the original item have improved rapidly.
Now both the look and feel of the product, plus the packaging it arrives in can make it hard to distinguish between real and fake. For this reason, some consumers actively search for counterfeit goods online which are available for just a fraction of the price of the original item.
Cost is perhaps the most significant element of the buyer’s decision-making process. Combine this with the demand for the latest gadgets, fashion items, and technology and it´s easy to see why so many consumers become blind to counterfeit goods online.
Whilst some consumers purposefully search for and purchase counterfeit goods, attracted by prices that are often a fraction of that of the official item. Others are enticed into buying fake goods, believing that they are genuine, it´s often these “too good to be true” prices which seals the deal.
It´s important to remember that not all counterfeit goods are sold at a reduced price. Some of the more sophisticated rogue websites and marketplace listings sell items for the same as the official brand and it´s not until the item is delivered that the consumer realizes they have been deceived by which time it is too late.
Could you spot the difference between an official brand website, and a rogue website? Identify a counterfeit item on a popular marketplace? Detect a fake social media account? Well, in some cases there are some obvious signs, the use of unofficial imagery, grammatical and spelling errors, or the presence of multiple hashtags are all telltale signs, however these websites, pages, and listings are becoming more and more sophisticated. The theft or intellectual property including logos, official imagery, and product descriptions is making it considerably harder for consumers to decipher between what is real and what is fake across online channels. This issue is highlighted by the fact that 1 in 4 consumers have unintentionally purchased fake goods online.
With an abundance of modern-day payment methods, e-commerce businesses now offer a variety of payment options at checkout. Today, payment gateways process transactions quickly, securely, and have helped to reduce shopping cart abandonment, increasing conversion rates, and boosting sales. The presence of well-known payment options often helps to build consumers trust.
A 2020 Worldpay report, published on Statista stated that digital and mobile wallets are currently the most popular payment method, providing 41.8% of online payments in 2019, a percentage which is estimated to grow by 10% to 52.2% by 2023. The most popular mobile payment methods include Alipay, PayPal, Apple Pay and Samsung Pay. Credit card payments made up 24.2% of payments online in 2019 but are projected to drop by 5% by 2023 to 18.8%. Other favored online payment methods include debit cards, and bank transfers.
Unfortunately, counterfeit products sold on the most popular marketplaces, and on rogue websites which sell fake goods, are also offering these recognizable ways to pay. This gives shoppers a false sense of security, many assuming that if such items may be paid for with legitimate payment providers then they must be genuine.
Delivery methods and times have also improved astronomically over the past decade. Now online shoppers expect a variety of next day, or even same day delivery, and instore collection options. Well, cybercriminals are also offering speedy and convenient distribution methods which once again instills trust to unsuspecting shoppers, encouraging consumers to purchase these illicit goods.
A simple lack of awareness in terms of the risks which exist across online channels leaves unsuspecting consumers wide open to the threats associated with counterfeits and brand abuse. It is the combined responsibility of digital channels such as marketplaces and social networks, alongside the brands themselves to ensure consumers are safe online. The necessity to educate consumers of the risks is clear, as 52% of consumers believe that if a product is listed on a digital marketplace then it must be genuine.
In almost all cases, the cost of contracting a brand protection solution is covered by an increase in sales, improve search engine optimization, improve consumer confidence, and brand reputation.
Many brands, particularly small to medium e-commerce companies may wrongly assume that their brand is not targeted by cybercriminals, but the reality is that the situation requires continuous monitoring. Those looking to profit by selling counterfeit copies, whilst abusing intellectual property online are known to target all types of businesses, regardless of their size, industry, or geo-location. The issue of counterfeits and brand abuse in a threat which must be addressed.