Counterfeiting and refilling have become a norm in the cosmetics industry. Cosmetic and skincare products are things we can not do without. In fact, it they have become things that we use almost on a daily basis. Reports indicate that the cosmetics industry witnessed a 6% in crease in value in the year 2018. If the experts are to be believed, a revenue rise of 7.14% is expected to be clocked by the industry by 2023.
Fake cosmetics manufacturing has been a problem since the very beginning of the industry itself. Some acknowledge and still use them because they do not know to differentiate between the fake and original. Most are not even aware the makeup from the favourite brand they are wearing could be a fake. A few other consumers however deliberately opt for the counterfeiters because they come at a much lower price point; these once are motivated by affordability.
The Growing Problem
Personal care is widely known to be big global business. According to a report by the Personal Care Products Council (PCPC), which was prepared by PricewaterhouseCoopers (PwC), the personal care industry in the United States, which entails colour cosmetics, perfumes, moisturizers, deodorants, shampoos and hair colour alone was responsible for $236.9 billion in the gross domestic product in 2013. The industry has been snowballing particularly after the pandemic. With video calls becoming a way of life and people being able to show only their faces, cosmetic products have become indispensable.
As the cosmetics business is charting a steady growth course, the sale of counterfeited and refilled cosmetics is also growing. The Customs and Border Protection Agency in the United States seized 2000 shipments that consisted of counterfeit cosmetics worth an estimated $1.4 billion in 2013. According to the Organization for Economic Cooperation and Development, global seizures of counterfeit perfume and cosmetics jumped 25 per cent from 2011 to 2013, making the cosmetics industry a growing sector of the $461 billion annual trade in pirated and counterfeited goods.
Recent Fake Cosmetics Seizures
In April 2018, the Los Angeles Police Department (LAPD) confiscated fake beauty products worth $700,000 in the Santee Alley Fashion district. The department seized makeup products that sort to counterfeit the brand Kylie Cosmetics by Kylie Jenner in January 2020; It was worth $300,000.
Counterfeited cosmetics is not restricted to a single geographic location. Far east from the United States to the Eastern Chinese city of Taizhou, the police confiscated a huge load of counterfeit cosmetics from numerous underground hubs. The seize, which included fake products from brands like Chanel, Christian Dior, L’Oreal, Lancome, and Estée Lauder had a combined street value of $120 million in 2017.
The Local Government Association in London unearthed hundreds of thousands of pounds worth of fake cosmetic goods in 2018. This included products from well-known brands like MAC, Chanel, and Benefit among others. Be it the West or the East, the market of counterfeited and refilled cosmetics goods is strong and functional across different latitudes and longitudes.
The Impact of Refilled Cosmetics
The activities of counterfeiters deprive brand owners of the revenue they are entitled to after years of hard work and heavy investments made in product research and development. Besides, the selling of refilled fake products in original packages or substantially cheaper versions through unauthorized dealers via black and grey markets also negatively impacts the goodwill that trusted brands have.
These fake products do not only affect brand reputations and customer loyalty, but these products that most often contain toxic ingredients are usually hazardous to consumers, and they sometimes lead to long-term health issues. Counterfeits are usually made in poor and unhygienic conditions, where the temperature is unsafe, and dangerous levels of bacteria are cultivated without control. Also, the ingredients do uusually contain high levels of toxic or banned substances like cyanide, mercury, lead etc. Counterfeiters do not even have any hesistations when it comes to the use of poisonous substances like arsenic, beryllium, and cadmium.
Unregulated manufacturing practices make products unsuitable in most cases. Considering how sensitive our skins are, regular usage of such products would cause serious skin irritations and eye infections. Sometimes, they lead to permanent scarring.
Brands Creating Awareness via the Internet
The pandemic has resulted in a major shift in the purchasing behaviour of people who now more than ever resrt to e-commerce websites to make their purchases, and cosmetic users are no exception to the norm. A large share of customers buys cosmetics online and many do not have a problem buying them from third-party websites if offered at discounted rates. This is one of the key factors that provide a suitable breeding ground for counterfeiters.
However, brands have now started using the internet to protect their products. They have realized the power and the reach of social media and are using it to their best advantage to check for counterfeit and create awareness and educate consumers on how to differentiate originals from fakes.
In 2018, Kylie Jenner, the founder and owner of Kylie Cosmetics responded to the query of a fan on the validity of a product. She mentioned that products of the brand were available only via its official website and urged customers to refrain from purchasing them from other websites. A few months later a Twitter notification was sent by Rihanna’s Fenty Beauty to its customers. It mentioned an unauthorized online retailer that was purporting to sell Fenty products. The brand also went on to share information on its authorised distributors.
Fighting Counterfeit Cosmetics
Today, cosmetic brands have become more aware of adulterations than ever before. They are using campaigns and putting strategies in place to check counterfeiting. However, without a strong brand protection solution, not a lot can be accomplished, especially for high-end cosmetic brands; customers will end up buying the knockoffs if they are available at a reduced price. This is why effective brand protection is vital for brands, especially for cosmetics, given the sensitive nature of the product.
There are a number of anti-counterfeiting solutions available on the market, but most of them are either obsolete and can be easily replicated by counterfeiters, or they are not tamper-proof.
The Cypheme labels provide a comprehensive brand protection solution for the cosmetics industry. We use the word comprehensive because our solution not only helps in fighting counterfeiting, but is equally efficient in geo-locating illegal manufacturers so that brands can take the necessary legal actions against these criminals.
Since inception, Cypheme has been providing protection to brands across different industries ranging from Wine and Spirits to document protection, food, and beverage, watch and jewellery, and pharmaceutical among others. The label developed by the company is powered by Artificial Intelligence which empowers anyone in the distribution chain right from the manufacturer to the end consumer to check if the product is authentic by taking a picture with their smartphone. The photograph is sent to the Cypheme artificial neural network for analysis, and within seconds one can know if the product to be purchased is genuine or not.
One of the largest drawbacks of an anti-counterfeiting solution is getting replicated by counterfeiters. The Cypheme label uses a special fingerprint that is unique to each label, and it is made using special chemical ink that makes it impossible to replicate.
The brand protection solution by Cypheme is revolutionary in every sense of the term and has been largely instrumental in saving companies over the years. It is therefore imperative that cosmetics brands resort to our solution to stay many steps ahead of counterfeiters and competition.