Observations from many quarters show that the advent of COVID-19 has come with an increase in the sale of counterfeit beauty products. This is especially so because of an increase in online transactions, thus making less tech savvy and older folks who are new to e-commerce an easy target.
According to Gilles Bonnabeau, Cypheme’s Vice President for Sales overseeing Europe and Africa, hair-care and cosmetics brands have always been bedeviled by the activities of unscrupulous and criminal-minded counterfeiters, but with the COVID-19 period, there has been an exponential increase in the unit number of counterfeits being sold on the beauty market.
“Since the inception of the COVID-19 lockdown in the first quarter of 2020, counterfeiters are taking advantage of the increase in online purchases to sell sub-standard imitations to unsuspecting buyers,” Mr. Bonnabeau says. “According to data from McKinsey, sales in beauty market products over the COVID-19 restrictions period has increased by between 20 and 30 percent and majority of this is attributable to online sales,” he adds.
Fake products have been particularly thriving in the pandemic era because the authorities with the requisite oversight have had their hands full trying to assuage the negative impact of the Coronavirus on the health of the public. In addition to this, factories of counterfeiters kept running as those of legitimate beauty enterprises got shutdown or were running at half capacity as the impact of the virus escalated, thereby rendering a large chunk of the workforce incapacitated.
According to the US Patent and Trademark Office, counterfeiting is currently the largest criminal enterprise in the world, and it predicts that the fake goods industry would contribute as much as $4.5 Trillion to the global economy by 2024. So excruciating is the situation that beauty industry conglomerates like L’Oréal and Estée have set up dedicated legal and security departments to serve as an anti-counterfeit shield for their products.
Also touching on the situation of COVID-19-related increase in counterfeiting activities in the beauty industry is Tony Belasco, Vice President of Sales at Cypheme for North America and the Asia Pacific region. “There are many beauty enterprises in the regions I oversee which have urgent needs for anti-counterfeit technologies like the ones we provide at Cypheme, and we have witnessed an increase in demand particularly in these peculiar COVID-19 times,” he said. “The activities of counterfeiters go beyond causing loss of revenue to producers of the original products, sub-standard imitations also have devastating ramifications for the image of brands, this is why now more than ever, it is important for stakeholders in beauty industry to be proactive with seeking out anti-counterfeit and brand protection solutions,” Mr Belasco adds.
Majority of the times, consumers blame brands for the proliferation of fakes and sub-standard imitations of their products as they believe that it is the company’s responsibility to protect their own turf; In fact, 88% of consumers are of the view that the buck stops at the doorsteps of brands to stop the counterfeiting of their products. Additionally, 68% of consumers are not happy with the work being done by brands to address the counterfeiting situation of their products; Drilling down on this, 52% of American consumers say that they have lost trust in a brand after unsuspectingly purchasing a fake version of the product – this should be a wake-up call to beauty market players.