COVID-19 has destroyed lives and businesses, and now it’s impacts are fuelling the counterfeit trade like never before. Is your brand ready for the rapid rise in fakes flooding the market?
From June to August this year, Nike saw digital sales grow by 82% year-on-year, counterbalancing lost revenues from purchases in-store. On face value this looks like great news for Nike, and a positive sign to other businesses that the impacts of COVID-19 can be overcome, primarily through online sales.
In fact, according to a recent study conducted by Bazaarvoice, 49% of consumers globally admit to shopping online more frequently than they did before the coronavirus pandemic, rising to 70% in Mexico and 62% in the USA. These figures were confirmed by Adobe, which calculated that online sales had generated US $497 billion in the first eight months of the year in the US. As of August, 130 days in 2020 exceeded US $2 billion in online sales, compared with only two days in 2019 (outside the holiday season).
This year, there has been a spike in demand for essential products like hand sanitizer and face masks, as well as non-essentials that help people cope with long periods at home, like beauty products and sporting equipment, as people fear shortages due to factory shutdowns and closed borders. Combined with the dramatic increase in online shopping, these conditions are perfect for counterfeiters and they have been taking advantage of brands and consumers throughout the pandemic.
Even before COVID-19, it was estimated that the counterfeit market accounted for somewhere between 5% and 7% of global trade, and that by 2022 it will be a US $4.2 trillion dollar industry, with global damage from counterfeit goods exceeding US $323 billion.
COVID-19 has accelerated this process, with counterfeiters often targeting people who are using the Internet for the first time to purchase online, like older shoppers, as well as those attracted by cheap prices due to reduced income and budgets because of the economic crisis.
One researcher from the University of California has declared that we are in the midst of a ‘cyber syndemic’. ‘Syndemic’ refers to two epidemics going on at the same time, and in this context “we are dealing with both an outbreak of COVID-19 from a public health perspective and an outbreak and digital contagion of COVID-19-related cybercrime”. The researcher and his team detected 2,000 fraudulent postings on social media tied to fake COVID-19 health products between March and May this year. Additionally, China has confiscated 31 million fake face masks, and 200 posts have been removed form Etsy advertising counterfeit face masks, lab coats and infant gas masks.
But, it doesn’t stop at pandemic-related products and ‘cures’. A discovered that half of consumers purchased counterfeit sporting gear and equipment during quarantine, with an alarming 30% buying fakes knowingly.
It goes without saying that brands lose out on revenue when consumers buy counterfeit products deliberately, but even more worrying is the reputational risk when consumers discover that a product they thought was authentic is fake. Brand management firm, Incopro, found that 52% of US consumers have lost trust in a brand after unintentionally purchasing a counterfeit product online. With both profit and brand loyalty at stake, now is the time for brands to increase their brand monitoring and protection, not let it become another victim of the pandemic.
YPB’s tracer technologies are invisible to the human eye, and can be used on thousands of products. The T2 tracer, along with our MultiSec Thread technology, can even be integrated into polymers, yarn, plastic and ink, and is virtually indestructible.
Each product embedded with one of our world-leading technologies are ideal for high-speed production lines during periods of increased demand, like in 2020. Plus, consumers can authenticate products the minute they open a home-delivered package, and using our Connect Platform brands can make sure authenticity triggers engagement, providing information, such provenance of a product or useful care and safety tips, in an omnichannel environment.
COVID-19 has moved millions of sales online and is fast-tracking the counterfeit trade – contact us today to find out how to make sure your brand survives the pandemic and beyond.