For small and medium sized businesses (SMBs) there are numerous challenges which they must overcome to grow and become successful in todays globalized economy. Building a strong brand is key, and whilst every effort is focused on realizing this objective, many are ignoring external factors including counterfeits and brand abuse which are having a detrimental effect on their sales and brand reputation.
Attributing funds in the necessary areas is a challenge, however a budget must be made available to implement a brand protection strategy which can fight their biggest and most formidable competitor, cybercriminals. Let us explain why…
All brands are at risk from counterfeits and brand abuse
Newly established SMBs, those operating only within local markets, or those expanding into new markets may believe that their brand and products are unlikely to be targeted by cybercriminals, however, that is a short-sighted assumption which must be rectified.
If there is consumer demand for a brand, a product, or a service then there is an opportunity for those that wish to piggyback on its success, and that is exactly what cybercriminals are doing. In fact, 3.3% of world trade is in fake goods, and 6.8% of all goods entering the European Union are counterfeits, two stats which gives us an idea of how sizeable and widespread the issue really is.
Our own research tells us that four out of every five SMBs suffer from some form of counterfeits or brand abuse, yet many small and medium sized businesses are completely unaware of the threats which have the potential to hinder their growth from both a financial and reputational perspective.
In fact, our recent study which analyzed more than 12,000 businesses headquartered in Europe, and North America, of which 5,178 were SMBs, we discovered that 80.24% of SMBs were affected, whilst a marginally greater percentage (81.32%) of large companies had issues with counterfeits or brand abuse.
SMBs may in fact be more vulnerable to counterfeits and brand abuse than large businesses
Larger brands may perhaps appear more appealing to cybercriminals with a stronger brand name, and more potential with a global audience of consumers, however these brands are aware of the threats and have brand and product protection strategies in place. They utilize the technology of third parties to constantly monitor digital channels in search of intellectual property abuse.
Those wishing to exploit the situation find that their rogue sites, listings on marketplaces, or social posts are quickly detected and removed. However, those that do not have protective measures in place remain blissfully unaware of such infringements, allowing the threat to remain, which impacts on sales and brand reputation.
The technology exists today for constant monitoring and the removal of these harmful threats within digital channels, and despite concerns from smaller businesses in relation to associated costs, such services often pay for themselves. Companies who contract brand protection services frequently cite a subsequent increase in sales throughout various channels, and higher rankings in Google searches which result in increased brand awareness and web traffic.
For SMBs, the question shouldn´t be “can I afford it?”, it should be “can I afford not to?”.
Which industries are most susceptible to counterfeits and brand abuse and what are the risks?
We discovered that whilst all industries are at risk, some proved more vulnerable than others. The fashion sector suffers the most with 93% of companies affected, followed by electronics (82%), sports (79%), homeware (73%), toys and games (69%), and beauty and personal care (65%).
Counterfeits targeting the toys and games sector are a particular cause for concern as they are intended for the hands of small children. Whilst fake beauty and personal care products are sold for use on the body and may also be dangerous.
Counterfeits in general are renowned for being made using lesser quality materials or ingredients, and usually disregard rules and regulations relating to safety and other procedures and regulations. They pose a serious health issue, and these fake items may be being advertised and sold under your brand name.
Does brand location make a difference?
Well, todays globalized economy makes counterfeiting and distribution a far greater task to monitor and control. It should be noted that counterfeit products may be sold in the same digital channels where the original item can be found, however they may also be sold in different channels and within different markets worldwide.
We found that SMBs from the US attract the most attention from cybercriminals, and in Europe the top countries are the UK, Italy, and France, closely followed by Spain and Germany.
This indicates just how widespread the issue is. It´s a concern on a global scale which demands continuous monitoring and protection.
Are consumers aware of the issue?
Whilst some consumers are actively searching for counterfeit goods, driven by lower prices, or perhaps the desire to wear or use products from luxury brand names which would otherwise be priced beyond their means, others are being duped into purchasing fakes believing that they are the official item.
In our exclusive e-commerce research study, we discovered that whilst 91% of respondents are aware that counterfeits are advertised and sold online, one in four have unintentionally purchased one. As a direct consequence many of these consumers stopped buying from the official brand, warned friends and family, or even left negative reviews with the official brand. This is concerning for brands as 71% confirmed that they always (34%) or usually avoid brands or products with negative reviews (37%). In fact, just 4% are not influenced by the views of other consumers.
Consumers must be vigilant when shopping online, however many let their guard down when shopping on well-known digital marketplaces, whilst scrolling down social networks, or when searching on Google.
Brands who launch in new markets must also be aware that local consumers are likely less familiar with their products compared to shoppers in regions where their brand is well established, therefore both brands and consumers are more exposed to the risks of counterfeits. Brands have an obligation to not only protect their own interests, but also the interests of their customers too.
How counterfeits and brand abuse are detected and categorized at Smart Brand Protection
Our mission is to make brand protection affordable and accessible for brands of all shapes and sizes, providing visibility of the threats which exist on the internet. To achieve this, we offer a free brand scan service which searches various digital channels including search engines, marketplaces, and social networks in pursuit of counterfeits and intellectual property abuse.
We categorize brands based on the number, and level of infringements we discover, and report back on our findings. We pride ourselves on transparency, and our tailormade brand protection packages which are designed to work for the specific brand and product needs of individual companies.
Our aim is to minimize the negative impact that counterfeits have on sales and brand reputation. Our technological platform utilizes artificial intelligence to monitor possible infringements in real-time, analyzing and eliminating illegal copies and falsifications which infringe intellectual property rights.
Do you want to know if your brand is being infringed online?
Your brand is at risk from counterfeits and brand abuse online, request your free Brand Scan today.