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Counterfeit cosmetics, the ugly side of the beauty industry

ANTI-COUNTERFEITING
BRAND PROTECTION
BEAUTY
RESEARCH STUDY
July 27, 2022

The cosmetics industry is thriving, yet it’s not all glitz and glamour as counterfeits increase. Discover the latest consumer trends in our exclusive research study.

Do you want to know if your brand is at risk online?
Talk to an expert
Research Study: Counterfeits and online trends in the beauty and cosmetics industry
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In 2019 the global cosmetic products market was valued at 532.43 billion US dollars, and forecasts project it to reach 805.61 billion US dollars by 2023. Beauty product manufacturers such as L’Oréal, Unilever, The Estée Lauder Cos. and Procter and Gamble Co. lead the way in terms of revenue, promoting their wide range of skincare, haircare, make-up, perfumes, and hygiene products digitally to a global audience. However, counterfeit cosmetics threaten to destroy consumer confidence and brand reputation.

Pros and cons of the digital transformation

There’s little doubt that the beauty industry has benefited from the digital transformation and particularly the emergence and growing popularity of social channels. Brands are increasingly utilizing platforms such as YouTube, Instagram, and Facebook to reach consumers with a variety of engaging content. These constant streams of content include tutorials, Q&A’s, comparisons, product reviews and user generated content to name but a few. Celebrity endorsement and marketing campaigns using empowering messages are also adopted, helping beauty brands to stand out in a highly competitive market.

However, it is not all glitz and glamour! Cosmetic companies are in the midst of a seemingly endless war against those seeking to abuse their brands, mimic their websites, steal their intellectual property, and sell counterfeit or look alike products under their brand name. Powerful content and effective campaigns help to drive awareness and revenue for official brands however it also makes their brand and products more attractive and susceptible to counterfeiters. The damage caused to brand reputation and revenue as a result of this fraudulent activity is clear for all to see.

Often consumers are being deceived by sophisticated digital marketing campaigns, designed to look and feel like those of the official brand, driving sales in fake products. Concerningly, a growing number of shoppers are opting against the purchase of genuine cosmetic products in favor of counterfeit copies despite the well documented risks.

Exclusive consumer research study

In our exclusive research, we found that 60% of respondents have purposefully bought counterfeit cosmetic products online, with 90% of that group admitting that they would do so again. But what is driving this behavior and how is this impacting on consumer confidence? Well… shoppers who are duped into buying fake cosmetics under a specific brand acknowledged that they would stop buying cosmetics from that brand (41.5%). Some would stop interacting with social posts (32%) or lose trust in discountsand promotions (26.18%).

Fake or genuine, just how confident are you?

When we think of counterfeit cosmetics many consumers believe that they are easy to tell apart from the real deal, with cheaper packaging, and an inferior quality product being the main giveaways. However, counterfeiters are becoming more skilled at replicating official items and deceiving shoppers online. By selling fake products on legitimate marketplaces, or through rogue websites designed using the same look and feel as those of the official brands many consumers are left unable to decipher between genuine items and fake copies.

We found that almost half of respondents in our research study were unsure or accepted that they would be unable to spot the difference between a fake and a genuine cosmetics product online. That means the other half may be a little too confident, leaving themselves open to these sophisticated scams.

In fact, consumers often let their guard down when shopping on what they believe to be legitimate sites or on official marketplaces, especially when familiar payment options are available. Advertisements across social channels are also driving traffic to counterfeit products. It is these sophisticated approaches which mirror those of the genuine brands which dupe unsuspecting shoppers into a sale. It is often not until the item arrives at their home that the penny drops, in fact on occasions nothing arrives at all as cybercriminals take payment for a product which does not even exist.

The risks are real, so who is buying and why?

It is clear that not all consumers who purchase counterfeit cosmetics are doing so by mistake as the market for fake goods continues to grow. Cosmetics are manufactured for use on the skin, hair, eyes, or other areas of the body and go through strict regulations and testing to ensure they are safe for purpose, however counterfeit copies do not follow the same process. In fact, the dangers associated with these fake items are there for all to see as we reflect on horror stories shared in the media. So, it is somewhat surprising to see the popularity of fake cosmetics when we are aware of the related health risks.

We discovered that 73% of consumers who have bought counterfeit cosmetics online were attracted by the lower prices. 43% of respondents believe that inferior ingredients are one of the main differences between genuine and fake products, whilst 38% admitted that they are concerned about the damage they could cause to their body.

Understanding the latest consumer behaviors and trends is key if cosmetic brand owners are to create effective strategies to combat their rise in popularity and sales online.

Do you want to know if your brand is at risk online?
Talk to an expert
Research Study: Counterfeits and online trends in the beauty and cosmetics industry
Get your report

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