Social Media Fakes Threaten the Cosmetics Industry

  • 19.5 percent of online shoppers are buying fake cosmetics online by mistake
  • 50 percent of respondents think it is the brand owner’s’ responsibility to remove fake items from online platforms
  • 69 percent of respondents are concerned about counterfeits in the cosmetics industry and believed it to be a problem

Barcelona, 30th May 2018 – Red Points, the technological solution in online brand protection, today released a new report looking at the rise of counterfeit cosmetics on social media, with findings revealing that over 50 percent of all online infringement detections are currently found on social networking sites.

In recent years, the cosmetics industry has undergone a significant upheaval partly due to the popularity of digital marketing through social media channels, leading to a growth in the illegal cosmetics market. In fact, the research found that almost half of the respondents (45 percent) have purchased cosmetics via social media platforms, with 19.5 percent of them buying fake cosmetics online by mistake.

Compared to any other industries, the report shows that the cosmetics sector has been the most affected by online brand infringements, with counterfeiters favoring social media platforms to sell fake items. What’s more, the resale of authentic cosmetics products on the so-called “grey market” has also played an important role in further damaging the legitimate cosmetics industry worldwide.

In addition, with the majority of participants (69 percent) expressing strong concerns about counterfeits in the cosmetics industry, this poses a great challenge to brand owners which are not only facing an increased loss of profit but should also be held responsible for removing all fake items from online platforms according to 50 percent of respondents.

Commenting on the report findings Laura Urquizu, CEO of Red Points, said:

“Counterfeiting is a challenge that has always plagued the cosmetics industry but which has been amplified in recent years, with the advent of social media, despite online platforms’ work, such as Amazon, eBay and Facebook, with brands and law enforcement to zero in on counterfeiters. Unless companies implement smart ways to address the issue head-on, counterfeiters will continue to exploit gaps in the system to spread out illegal cosmetics online.

Our experience, working with brands in the cosmetics sector across the world, has shown us that the sooner a company puts a real plan of action in place to protect their brand’s distribution channels against grey market trading and their products from loss of revenue resulting from counterfeiting, the more chances they have to thrive and stand out in today’s competitive marketplace.

That’s why at Red Points we continuously invest in new technologies to develop smart solutions that effectively detect and report online infringements and ultimately help brands to safeguard their priceless IP from counterfeiters.”

The report shortly follows the launch of Red Points Academy, the first online certification for Intellectual Property Protection designed to help companies upskill themselves on critical areas of IP enforcement.