In 2020, a Reddit user under the name Ifoundfivedollars shared an alarming picture on the platform. After using a popular face mask, she experienced severe inflammation and reddening, leaving her in some discomfort -- a nightmare for any skincare aficionado.
There is no suggestion that the customer was using a fraudulent product here. Instead, it is possible that she simply had an allergic reaction. The poster shared no information about her history of allergies, so there is little evidence from which to draw a conclusion. However, the story does underline the potential dangers that are inherent when using skincare products, particularly if you are not certain what's in the bottle.
But allergic reactions happen all the time, right? For many consumers, if they experience discomfort or even harm to their skin, this is the go-to response.
Well, yes, allergic reactions do happen, but to understand more about this, we first need to recognize what an allergic reaction actually is. Dictionary.com defines an allergy as "an abnormal reaction of the body to a previously encountered allergen". The keyword here is "abnormal", i.e. this is not something that should be happening. We cannot be allergic to something like carbon monoxide gas, for example, because this substance is poisonous and harmful; instead, we are allergic to things like grass pollen and peanuts -- substances that should be harmless, and are harmless to most.
Legitimate skincare products are rigorously tested to make sure that they are not harmful to humans. While skin damage or irritation could be the result of an allergic reaction to an otherwise harmless substance, it could also be an indicator of the presence of something more harmful.
The cosmetics industry is a massive market and was estimated to be worth around $523 billion worldwide in 2020. It's also a rapidly growing market and is expected to hit $805 billion by 2022. There is a great deal of money to be made here, and this is attracting counterfeiters and scammers.
But isn't this just conjecture, verging on paranoia? After all, just because the global cosmetics industry's dollar worth is measured in the hundreds of billions doesn't necessarily mean that fake products are going to flood the market.
Unfortunately, these counterfeit makeup products do exist, and they are causing serious problems. In January 2020, a consignment of fraudulent Kylie Cosmetics -- the brand that bears the name of socialite Kylie Jenner -- was seized by the LAPD, which said the products were worth over $300,000 in total.
The problem is not limited to the United States. In Taizhou, close to China's economic hub of Shanghai, police targeted underground counterfeit cosmetic producers who were manufacturing and selling fraudulent Chanel, Lancome, and Christian Dior products. The police operation recovered goods with a total value of over $120 million.
In London in 2018, a huge haul of counterfeit beauty products was seized, worth hundreds of thousands of dollars. Some of the fakes included counterfeit versions of popular brands such as MAC and Benefit. Following testing, it was found that users of these counterfeit makeup products were in danger of skin rashes and even chemical burns, as well as mercury poisoning in some cases. Traces of skin-whitening agent hydroquinone were also found, in excess of legal levels.
These counterfeit makeup statistics are alarming. What's more, they represent only three cases, in all of which the culprits were caught -- many more examples of fake cosmetics are still in circulation.
Daniel Shapiro, vice president of Red Points, a leading brand protection agency, paints a bleak picture of the situation. Speaking to Vogue Business, he described how the first half of 2020 had seen a 56% increase in the counterfeiting of products across Red Points' roster of 700 clients.
Shapiro identified one of the 21st century's key retail innovations as a key factor behind the increase: e-commerce.
“Counterfeiters always seize on opportunities for growth and with e-commerce sales booming, this is one of those opportunities,” he said. “The level of sophistication in searching marketplaces isn’t as good, and counterfeiters know that, so they’re flooding the space.”
It's true that e-commerce has democratized the retail sector, giving sole traders and small businesses the capability of reaching vast audiences with their products. However, this laissez-faire environment has also made regulation difficult, and, in doing so, has created the perfect eco-system for counterfeiters to strike.
Many of these smaller brands do not have the resources to deploy legal teams and are therefore left completely exposed to counterfeiters. This can prove catastrophic to small businesses, who may find that the very e-commerce platforms that have helped them to thrive may also make them vulnerable to fraud. It only takes a few instances of fraud to put the public in danger and to erode public trust in brands -- something that smaller brands might find themselves unable to recover from.
While digital e-commerce platforms are making life easier for counterfeiters, other digital solutions can provide an answer to this conundrum. One example of this is technology that is used to scan the e-commerce sites deployed across cyberspace, analyzing product listings and checking for fakes and frauds. The solution can then flag items, suppliers and sellers for removal or for investigation, providing a crucial line of defense against counterfeiters.
Software like this has already been used to great effect across a number of industries, and brands of all sizes are looking to solutions like this for protection.
But where does the consumer fit into all of this? How can digital solutions empower both business owners and customers to fight back against counterfeiters?
The engage™ platform and app are providing this empowerment. With the platform, business owners need simply to register their products on the system, and this information can be used to quickly verify product information. Using just a smartphone -- equipped with the engage™ app -- consumers and vendors can scan each product they receive and assess its veracity on the platform, making swift and effective verification easy. This is an important step for those wondering how to spot counterfeit makeup and cosmetics.
Businesses can also use the platform's engagement tools to build better relationships with consumers. This level of engagement is crucial in an increasingly distributed online marketplace, where businesses often struggle to achieve brand recognition. Increased trust and engagement helps businesses keep themselves protected from the uncertainty and brand damage caused by counterfeiters in the marketplace.
Reach out to our team and take a tour of the engage™ platform and app today. Learn more about how these solutions can protect consumers from fraudulent skincare items, and keep businesses safe from the damage to profit and reputation caused by counterfeiters.
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