The sale of counterfeit products currently represents 2.5% of global imports according to the OECD, amounting to more than USD 460 billion. Up to 5% of goods imported into the European Union are counterfeited goods. The sale of these counterfeit products concerns a range of industries, from luxury products and technological products to consumer goods.
The harm caused to the trademarks is significant and goes far beyond the financials, because it has been linked to organized crime and presents a threat to the users’ security and health.
Today the situation has worsened by the very rapid growth of the Internet which allows counterfeiters to achieve global reach, but especially, anonymity; the trade in counterfeit products through the Internet seized by the French customs amounts to 20% of imports against 1% in 2005
In addition, counterfeiters know how to use the very best marketing practices in order to achieve their goals: optimisation of search engines, purchase of advertising to direct the consumer to their site, use of spams and cybersquatting of domain names are only a few of their practices.
A multi-level strategy must then be implemented in order to decrease the sale of counterfeit products at delivery points but also at promotion sites.
The impact of online counterfeiting for businesses
- Loss of 5 to 9% of the gross turnover
- Damage to business and the trademark image
- Fraudulent use of the trademark by a third party and identity theft (of the trademark, the logo and a similar domain name), which may lead to the recovery of personal data or client banking information by counterfeiters
- Risk of confusion through the reproduction of the trademark and similar domain names: Internet users may thus hardly distinguish between the company’s official home page and the counterfeit home page, making loss of visibility a serious issue.
- Decrease in effective marketing investments
- Other issues related to the consumer’s security and health caused by use of defective counterfeit products, especially in the pharmaceutical industry.
How to reverse the trend of businesses on online counterfeiting
There are many ways for victims of such practices to limit or to stop these counterfeiters.
Step 1. Identifying the problem
The endangered business must assess the entire issue quantitatively, on national and international levels as well as on all types of websites (ecommerce websites, auction websites, BtoC, BtoB…).
By creating awareness in all business departments for the monitoring of counterfeiting activities (legal, marketing…), the business optimises its available resources and its chances of prompt detection, which also implies limited damages and faster recovery.
Step 2. Actively fighting the counterfeiting activities
Ruthlessness with counterfeiters helps deter them from counterfeiting our business products. They will naturally be more inclined to attack passive businesses, which seem to be easier targets.
Delivery points or promotion areas should not be neglected, particularly with respect to the safeguard of marketing investments made by the business.
Even though these counterfeiting activities must be actively counteracted, it is essential to prioritise these actions by identifying the main locations where the offences are being carried out so as to act precisely where they are located.
The business may also fight against the sale of counterfeit products online by informing its clients on the official selling points and the risks of buying from alternative sites.
Finally, the business may be assisted by intellectual property protection and enforcement solutions providers, or even have the assignment delegated to their provider.