Government recommendations to stay home, and in some countries the enforced confinement due to the global pandemic, has influenced buyer behavior and increased our reliance of, and activity through digital channels including online marketplaces, social platforms, and websites. The need for counterfeit protection has never been greater!
Whilst some industries have suffered from a loss of business, others have seen demand soar. Online sales of sports and fitness equipment, home improvement products, kitchenware, boardgames and toys, and goods to work from home have climbed sharply. This demand has attracted cybercriminals who are profiting from the sale of counterfeit items to unsuspecting shoppers.
E-commerce sales overview
During this period, e-commerce has grown significantly, and particularly throughout the hardest hit countries, with an 87% increase in Italy and a 60% rise in Spain where they are beginning to share their lengthy strategies to ease restrictions.
SaaS platform provider Quantum Metric reported that global online sales have risen 52% whilst the number of internet shoppers has also climbed by 8.8% compared with the same period in 2019.
Klaviyo, a Boston based email marketing firm conducted a survey with their network of 30,000 businesses relating to the latest behaviors and trends during this period. They discovered that more than 28% of businesses were seeing sales increase. However, 40% of companies continue to suffer from shipping issues, whilst more than half (56%) are experiencing problems related to supply chains.
We take a look at the five industries which are thriving as a result of recent changes to consumer lifestyles and behaviors but, are also proving to be increasingly susceptible to counterfeits and intellectual property abuse online.
1. Sports, fitness equipment, and clothing industry
The health and fitness industry as a whole have had to reinvent itself to serve consumers with a digital first approach. A recent report from Comscore found that web searches for sports equipment, clothing and content (including fitness videos and workout plans) in the countries most affected by COVID-19 have risen sharply:
“Compared with the week Dec 30, 2019 – Jan 5, 2020 visits to diet, exercise, or fitness-related websites or mobile apps in the week of March 16-22, 2020 went up by 69% in France, 20% in Germany, 133% in Italy, 31% in Spain, and 23% in the UK.”
This was driven by consumers looking for alternative ways to keep active, fill leisure time, and to stay fit and healthy indoors whilst gyms and sports clubs remain closed.
Consumers are now relying solely on search engines, websites, and marketplaces to find and purchase home-fitness products. In fact, it was estimated that sales in sports and outdoor goods would grow 236% on amazon.it from 02 March to 09 March 2020. Demand for static bikes, rowing machines and treadmills have all increased.
But it is not just high-priced equipment that is in demand, sales of skipping ropes, dumbbells, training benches and yoga mats have also grown which facilitate home workouts.
The number of fake accounts on social networks has also climbed steeply, advertising the sale of products related to the sports sector. Often the seller uses their own images rather than those of the official brand, and profiles do not have the official verification.
It is also common to find counterfeit products across various marketplaces at significantly reduced prices compared with those of the original.
In the image below we can see the adjustable Sweat Sweat belt. The recommended retail Price of this item is €30, yet the counterfeit is available for just €3.
Another common feature of counterfeits is the over-stock, in this case we can see that we have the option to buy up to 10,000 units at a time.
Many consumers acknowledge the difficulty they have in recognizing if the products they view online are real or fake. In fact, in our exclusive sportswear consumer research study which we conducted earlier this year, we discovered that 48% of respondents were not confident of their ability to differentiate between a counterfeit and the genuine item, whilst an additional 9% conceded that they would be unable.
When asked about their trust in specific digital channels, 42% believe that the sportswear sold on official marketplaces must be genuine, whilst a lesser percentage (30%) have complete faith in the adverts they see across social channels. Worryingly it is these channels which counterfeiters are using to drive traffic and sales, damaging consumer confidence and brand loyalty.
It is clear that some consumers are consciously buying counterfeit sports equipment and clothing, whilst others are tricked into parting with their hard-earned cash.
2. Home improvements industry a target for cybercriminals
It seems that some consumers are finding more productive ways to fill their newfound time by carrying out various home improvements.
A recent study from Ecommalia indicates that visits to home furnishing websites have grown by 15%, whilst products related to adult crafts were up 10%. A Statista report also found that sales of construction materials have increased 31.4% in countries such as the United Kingdom where the virus has hit hard.
Our expert team of market research analysts have recently reported a rise in counterfeit DIY products surfacing across digital channels. For example, a counterfeit electric drill was found on one of the leading Chinese marketplaces DH Gate, which attracts an average of 206,000 visits per month. This counterfeit drill was marketed under a well-established, market leading brand and was available to purchase for just a fraction of the price of the original.
Elsewhere, we discovered various construction goods marketed across social platforms where the social account was missing the official account certification, using the logos of well-known brands to attract consumers and gain trust. These fake accounts are using the same methods as legitimate brands to promote their fake, and often dangerous products.
3. Office equipment
As offices were closed, enforcing remote working, and schools, colleges and universities shut their gates making home schooling and studying a necessity, more and more consumers began searching for and purchasing office equipment and materials to support their changing lifestyles.
According to a study by Stackline, sales of computer monitors increased by 172% as workers and student’s setup their workstations at home. Sales of computer chairs also rose by 104%, whilst desks, computer mice and keyboards have grown by 85% on average during the first quarter of 2020.
Demand for headphones, headsets and microphones has also increased by 58% year on year as video conferencing and online calls become the primary method of communication with colleagues, friends, and study partners.
Demand for such products has not gone unnoticed and the number of related counterfeit products appearing throughout online marketplaces, and their promotion across social channels has multiplied in parallel.
4. Board games and toys suffering from fake copies
It seems that many of us are turning to board games and toys for in-home entertainment for all ages.
In fact, the sale of children’s toys through digital channels has multiplied by four. The sale of educational toys has also risen to a similar level, where we have seen a 376% increase since schools shut due to the pandemic, and parents began home schooling.
Unfortunately, infringements within marketplaces and social channels have risen in parallel as cybercriminals recognize the opportunity to sell counterfeit copies. The damage these counterfeits have on brand reputation and sales is significant and have the potential to destroy consumer confidence.
In our exclusive counterfeit toys and board games research study, we asked participants if they were concerned about the rise in counterfeit toys and board games during this period of confinement. The vast majority admitted to being worried about the increase. 12.5% have ceased buying this category of products, 32.9% are only buying from the official brand website, whilst 36.7% are concerned however have continued to shop as usual. Just 17.9% claim to have no worries about the spike in fake toys and games seen across digital platforms.
5. Kitchenware susceptible to counterfeits
Most shoppers are following government protocol and limiting themselves to a weekly shop, or even using home delivery services for food shopping. So, it seems we are looking for new ways to ensure we have our daily essentials. This has seen the online sales of bread makers rise an astonishing 625% according to a study published by Stackline.
Demand for cooking equipment has soared in line with increased leisure time and the closure of cafes, restaurants, and other eateries. Families are cooking together, particularly those with young children, and visits to websites offering recipes and nutritional information have skyrocketed.
As a result, cooking utensils have gained great prominence and are in the crosshairs of cybercriminals. It is common to find counterfeit products available in different marketplaces at significantly lower prices than those offered by official suppliers. Take this rice mold from the Italian brand Arancinotto for example. The official price is €15 yet a counterfeit copy can be obtained for just €3,51.
Another feature of counterfeits is the over-stock, in this case we can see this it is possible to purchase up to 800 units at a time. In contrast, the official brand offers packs that vary between 2 and 4 pieces. In addition, the images are not from the official brand, so we can conclude that this is not a certified seller.
AliExpress is a Chinese marketplace owned by Alibaba Group. Founded in 2010. This hugely popular marketplace receives an average of 379,000 visits per month.
Conclusion – 5 key takeaways
- It is strikingly clear that in these challenging times consumers have an ever-increasing reliance on digital platforms for all their shopping needs.
- Cybercriminals will take advantage of new opportunities, so if they see growing popularity or supply and demand issues they will pounce.
- Counterfeiters use the same digital channels to promote and distribute their fake goods. It is clear that some unsuspecting shoppers can be easily deceived through sophisticated scams.
- Once this challenging period is over, the way we shop and the products and brands that we trust may never be the same again.
- Brand owners must act fast and invest in counterfeit protection to limit the potential damage they have on sales, brand reputation and consumer confidence.
We are here to help!
At Smart Brand Protection, we protect the intellectual property of a wide range of companies operating online. Our special agreements with Google, the main social media channels and marketplaces enable us to detect possible infringements, removing social posts, eliminating listings on marketplaces and delisting URLs which lead to counterfeits and brand abuse efficiently.
Our goal is to minimize the negative impact that such infringements have on your sales and brand reputation.
Do you want to know if your brand is being infringed online?
Your brand could be at risk from counterfeiting and brand abuse online, request your free brand scan today!