Technology has revolutionised the market landscape, enabling brands to connect with consumers in innovative ways and more effectively than ever before. This affects purchasing behaviours and customers can now engage with brands, products and services through a dynamic range of channels. Trends can therefore emerge very quickly, particularly online where new brands, products or even new sales channels can go “viral” in a matter of days. This offers many new prospects for brands, but it also plays into the hands of opportunistic bad actors who will look to capitalise on the latest consumer trends (both products and popular marketplaces/sales channels) to try to maximise their profits. It is both important and potentially challenging for brands to stay abreast of the latest trends and to adapt anti-counterfeiting strategies accordingly. We have summarised a few current market trends below and the potential counterfeiting risks that brands should bear in mind.
Social media
It is well known that social media influencers can have a significant impact on consumer purchasing behaviour in general and studies have consistently demonstrated the significant volume of consumers that would be more likely to buy a product, or from a brand, that was endorsed or advertised by an influencer. Sources estimate that around 69% of consumers trust product recommendations from influencers, and 4 out of 10 consumers will purchase a product as a result of an influencer recommendation.
Studies conducted by the UKIPO have also shown that consumers are unfortunately prompted to purchase counterfeit products following endorsements by social media influencers. Whilst some unwittingly endorse fake products, there are some influencers who intentionally promote counterfeits on social media and perpetuate the “benefits” of buying fake items (primarily the lower cost). The role of social media and influencers in the facilitation of the counterfeit market is an important current trend that brand owners should be aware of, particularly those in the fashion, beauty, jewellery and accessories sectors, as these goods are the most frequently purchased because of an influencer recommendation. This is a particular problem amongst younger consumers – research showed that approximately 3 in 10 respondents aged between 18-24 (30%) and 25-34 (31%) purchase counterfeit goods.
Social media platforms have their own enforcement mechanisms to deal with IP infringement and the sale or promotion of counterfeit products – brands that find themselves the target of counterfeit-related content should implement a strong monitoring strategy and promptly remove infringing content before it can gain significant traction or views. In some cases, companies have also taken the step of initiating legal action against more prolific influencers promoting counterfeits, which may have some deterrent effect. However, it is more difficult to tackle the impact that influencers have on consumers’ perceptions of counterfeits. Campaigns to raise awareness about the risks of fake products to consumers (from a quality and/or health and safety point of view) and the broader criminal implications of the counterfeit trade can go some way to dispel the perceptions of counterfeits perpetuated by some influencers online. As part of this, brands could consider strategically partnering with influencers who aim to promote the benefits of purchasing genuine goods and counteract the narratives that promote fake products.
Dupes
The phenomenon of “dupes”, particularly in the beauty and fashion industries, is of growing concern to many brands. Around 11% of UK consumers purchase a dupe product at least once every few months and around one-third of US adults admitted that they intentionally purchased a dupe of a premium or luxury product.
It is firstly important to draw a distinction here between a “dupe” and a counterfeit product – a “dupe” will typically have a similar appearance or qualities to the product that they are looking to imitate, but they will not use the same trade marks. A counterfeit on the other hand, will feature a brand’s trade marks without authorisation with the intention of tricking consumers into thinking they are purchasing a genuine item.
Whilst the legal position in relation to “dupes” is more complicated than the position with counterfeit products, “dupes” can still have a negative impact on brands such as loss of sales and revenue, dilution of brand identity, and reputational harm; in some cases, enforcement can be possible, although it may be challenging if brands rely on other forms of IP such as registered designs and copyright to take action against such products. There are some cases in which “dupes” have been found to have fallen on the wrong side of the line – for example, Aldi’s “dupe” of a Charlotte Tilbury cosmetics palette was found to have infringed the copyright in both the design on the product lid, and the design that was embossed onto the products within the palette, in a decision from the UK High Court in 2019. Marks & Spencer was also successful in their lawsuit against Aldi’s “dupe” of their light-up festive gin bottle based on a number of registered designs.
A robust IP protection strategy covering off the most valuable elements of a brand and its products will afford the maximum opportunities to act against both counterfeits and “dupes” that are too close for comfort. Some brands have also tried to lean into the fast-growing “dupe” culture by, for example, hosting “dupe swaps” in which customers can exchange their lookalike product for a real one to see the difference in quality for themselves. This not only boosts the image of the brand’s genuine products, but it also tries to dispel some of the rhetoric and allure of cheaper lookalike products.
Brands, particularly those in the luxury sector, could also consider diversifying their portfolio to introduce entry-level luxury products or partnering with a high-street brand to appeal to consumers that would consider buying a counterfeit for cost-reasons. This approach would also combat some of the influencer-driven narratives as discussed above and of course would ultimately expand a brand’s customer base. This would need to be very carefully managed so as not to affect the allure of the original luxury products.
Re-sellers
A further concern for fashion and accessories brands in particular is the risk that counterfeits can make their way into the supply chain through re-selling platforms and businesses. It has been reported that consumers bought around $50bn of pre-owned clothing, bags and accessories in 2023, with resold luxury watches making up around 30% of the market’s total value in the same year. Driven by sustainability concerns and with sales on track to be worth around 10% of the global fashion market by 2025, it seems that re-selling platforms are here to stay.
Most resale platforms (particularly those specifically engaged in the sale of pre-owned luxury products at high price points) have internal authentication services; however, there have still been cases in which it has been held that counterfeits have been sold on these platforms and this leads to distrust by some brand owners. Inevitably, the authentication of a product can be difficult, and counterfeits can be highly sophisticated, particularly as advancements in technologies such as 3D printing allow bad actors to produce increasingly accurate and detailed fakes. Brands could therefore consider partnering with resale platforms or offering their own pre-loved marketplaces, which will allow them to tap into the opportunities offered by this booming market sector whilst also having some input in the authentication process – after all, brands are the experts on their products.
