Facing Counterfeiting Threats in the Cosmetics Industry
Cosmetics sales are skyrocketing, with the industry growing by 5% in 2018. The cosmetics industry is expected to be worth $ 863 billion by 2024. Hence, cosmetics are seen as an attractive opportunity for counterfeiters who wish to exploit consumer demand. In 2017, the US seized fake cosmetics at a 6.5% rate and the losses amounted to $ 69 million. In Indonesia, based on a Kompas report (08/03), until the end of 2019 there have been at least seven cases of fake cosmetics with a value of hundreds to billions of rupiah.
The losses incurred
Counterfeit cosmetics often contain harmful ingredients that would cause skin irritation, rashes or infections, and many are associated with a higher risk for cancer. The cosmetics that are frequently seized often contain harmful bacteria and toxic ingredients such as cyanide, arsenic, lead, mercury and in some cases, even rat droppings.
In addition to causing harm to the consumers, fake cosmetics are absolutely detrimental to the original cosmetic brands because consumers would consider the brands to be harmful due to the physical effects experienced by consumers after using it, without knowing that the product they are using is a fake.
Risk of counterfeiting on online platforms
In the past, many major cosmetic brands used offline investigations and carried out physical or in-person raids to prevent the sale of counterfeit cosmetics in convenience stores and shopping malls. However, with the development of online sales, actors and celebrities have also participated in marketing fake cosmetics on online platforms. They steal photos of real products then re-upload them on their pages and create fake testimonials that deceive consumers.
The sheer vastness of online platforms makes fake cosmetics more difficult to track because consumers do not see the physical goods directly, so counterfeiters “play” with promotional words that attract consumers and product photos stolen from genuine cosmetic brands further add to consumer confidence.
What can we do?
Educating consumers about the characteristics of counterfeit products, the dangers of using counterfeit products, and others is indeed one strategy to avoid the threat of counterfeiting. However, that is not enough. The main measure that companies must take to not suffer further losses due to cosmetic counterfeiting is to register a trademark, so that the company’s copyright as intellectual property can be protected. If any brand counterfeiting is found, the company can report it to the authorities.
However, as explained above, counterfeiting on online platforms is difficult to trace. Therefore, companies need third parties to help curb its circulation. Integrity Indonesia, as a trusted and experienced company in the compliance industry, provides trademark investigation services and market inspection surveys, both offline and online. Do not hesitate to contact us for further information.
Written by: Aqilla N