Research commissioned by Incopro (now part of Corsearch) reveals that 26% of US consumers have purchased a counterfeit online unintentionally in the last 12 months.
Consumer research: Is fake the new real? Living in a fake society – US (sample: 1,000 US consumers)
Hidden among promotions, online sales, and campaigns throughout the holiday season, are potentially dangerous counterfeit products putting consumers at risk that many remain unaware of.
This year, counterfeit seizures rose to US$1.4bn in the US alone . And the likelihood is that potentially dangerous fakes many times greater than that value passed through borders uninhibited, ending up in US households.
With fake goods proliferating online through marketplaces, social media platforms, and illegitimate websites, this increasing threat to consumer safety throughout the holiday season should prompt brands to take urgent action.
Threats this holiday season
Online consumer spending is projected to exceed US$586bn in the US by the end of 2019 and continues its upward spiral as retail footfall declines. Consumers now purchase toys from a wide array of online retailers, instead of established offline stores. Marketplaces such as Amazon – which despite being widely regarded by consumers as a trustworthy platform – are known to be inundated with counterfeit products.
Infringers are finding it increasingly easy to distribute fake goods online, with shopping habits moving to these marketplaces and resale sites.
Corsearch’s Brand Protection analysts discovered an increase in high-risk (likely counterfeit) listings on marketplaces in the run-up to Black Friday – the most popular period for purchasing Christmas gifts. For high-risk listings of a branded video game controller, we found:
- On eBay – an increase of 270% in average quantity sold weekly per listing by the end of November versus the beginning of the month
- On Amazon – an increase of 41% in average weekly potential sales per listing by the end of November versus the beginning of the month
Between November and December 2018, we discovered a 26% increase in infringing jewelry of a selection of luxury brands across all monitored online platforms. In the same period, instances of infringing premium watches also increased by 21%.
New Incopro (a Corsearch company) consumer research reveals that 27% of US consumers who have unintentionally purchased a counterfeit in the last 12 months have never received a refund after reporting a seller to a marketplace.
The research also discovered that 51% of US consumers conduct no or limited research on the authenticity of a product before purchasing it on Amazon. This is particularly alarming given that, as one of the world’s largest marketplaces, it continues to grapple with counterfeit products.
Fake toys putting child safety at risk
Baby product and toy manufacturers abide by stringent regulation covering materials, methods of production, and the inclusion of small parts.
Counterfeiters, on the other hand, care only about profit and little about child safety, producing toys in unsanitary and unregulated environments. They use poor-quality or toxic materials and often include loose parts that pose choking hazards. Fake versions of the branded Comotomo baby teether – one such counterfeit that could contain loose parts – can be found on the first page of Google search results, as discovered in recent research released by Incopro (a Corsearch company).
A toy on many of this year’s Christmas lists is the ‘L.O.L Surprise! Doll’ which has been heavily counterfeited according to The Counterfeit Report, putting children at risk of choking. Fake versions of this year’s popular children’s toys could also contain phthalates – harmful chemicals that can damage organs.
Corsearch’s consumer research revealed that 20% of US consumers have either intentionally purchased or considered purchasing fake toys, indicating that many are still unaware of the inherent dangers of these products. A further 9% purchased fake toys accidentally, highlighting their wide availability.
Taking the fight to counterfeiters
The US government has taken steps to stop the proliferation of fake toys online. The Stop All Nefarious Toys in America Act (SANTA Act) introduced this week, if passed, will mandate that marketplaces verify third-party seller details and make this information visible to consumers.
Marketplaces will be required to display the seller’s full name, full business address, verified phone number, verified email address and notify buyers if the order is fulfilled by a seller other than the one displayed in the listing.
Counterfeiting operations ramp-up activity in the run-up to Christmas and pose a clear threat to consumers. However, with increased information now publicly available as per the SANTA Act, brands’ ability to identify and remove counterfeits before they reach consumers will be more effective.
To achieve a meaningful reduction in infringement, brands should monitor all activity and trends during the holiday season. And for each high-priority platform, you should have a comprehensive strategy in place and harness your relationship.
Brand Protection technology that operates at scale
Capturing actionable data on seasonal activity is an impossible task to undertake manually, however. Corsearch’s Brand Protection platform, Talisman, allows you to make full use of your team’s resource by collecting a wide, relevant dataset that is then prioritized.
You will be able to focus your efforts on the largest infringers exploiting your brand during the holiday season to ensure maximum enforcement impact, protecting consumers and ecommerce revenue.
At Corsearch, we work with our clients to ensure they protect their consumers and brand reputation online. We allow our customers to meaningfully reduce infringement and increase their online sales by targeting the largest infringers. If you believe your brand is under threat and are interested to see how our technology can offer a long-term solution, request a free demo from one of our experts below.
This blog was originally published on the Incopro website. Incopro was acquired by Corsearch in 2021, with the two organizations combining their technology and expertise to better serve the market.