These Are the 11 Industries Most Affected by Counterfeiting

Brand Protection
January 11, 2021
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Industries Most Affected by Counterfeiting | engage™

Which do you think are the most counterfeited products in the world? Each year, countless fraudulent products are bought and sold across the globe, but which are the most counterfeited products, and what toll is this taking on different industries? We’ll take a closer look at some counterfeit goods statistics to try to gain a handle on this problem. We will also present a solution in the form of a new innovative app we’ve created to fight this problem and ensure brand protection for brands. 

Getting to grips with counterfeit goods statistics

First thing’s first. Before we analyze the industries most affected by counterfeiting, it is important to first understand the difficulties involved in approaching data of this kind. 

  • Firstly, there is no complete dataset. Most data is derived from customs and excise seizures, and therefore does not include the millions of dollars worth of counterfeit products that make it through the net.
  • Counterfeiting data only becomes available after it’s analyzed and organized by different institutions. Consequently, it takes a long time for such data to become public, which is why the numbers we’re presenting here date back to 2016. 
  • The data does not cover markets in which international intellectual property laws and anti-counterfeiting legislation are not upheld. In locations such as China, governments and manufacturers have struggled to protect commercial property from fraudulent producers. Losses from such practices are thought to be huge, but they are difficult to quantify, and so they are not included here.
  • It is difficult to quantify the full cost of counterfeit and pirated products. For the most counterfeited brands and for their consumers, the total expense can be huge. Once factors such as reduced market share, the cost of policing and tracing counterfeit shipments, associated criminal activities, direct harm to consumers, and other elements are factored in, the total cost is likely to be far greater than the resale value of the items themselves.

The 10+ Industries Most Affected by Counterfeiting

As discussed above, it is difficult to quantify the full cost of this fraudulent activity, and therefore, it is not easy to identify the industries hit hardest. We can, however, examine the most counterfeited items to get a good idea of which industries are being most affected by this type of fraud. While we wait for fresh data to be released, we’re basing our list on the most recent counterfeiting research by Statista.  

1. Shoes and footwear

According to data from 2016 extracted by Statista, shoes and footwear make up the highest proportion of counterfeited products. The numbers show that 22% of the total value of counterfeit goods seized in 2016 were in this category.

More recent data shows that this is still a problem for shoe manufacturers. In 2019, a shipment of over 14,800 counterfeit Nike shoes was intercepted at the Los Angeles/Long Beach Seaport. The items had a potential resale value of over $2 million, but would likely have been sold at a discounted price.

2. Clothing

In 2016, 16% of seized counterfeit goods were in the clothing category. As the fashion industry continues to attract customers of all ages, and with prices for upscale brands being extremely steep, this is an attractive proposition for counterfeiters. Just think about all the counterfeit Louis Vuitton bags that you can see on a daily basis in most countries in the world. 

3. Leather

Leather items include bags, accessories, furniture, and other items. This category does not include leather footwear or clothing items, which are analyzed separately. Leather goods made up 13% of counterfeit goods seized in 2016, so it’s a fruitful industry for counterfeiters. However, people are becoming more aware of the environmental damage that this sector creates, and the younger generation is switching to synthetic leather, or vegan leather. Many brands have also started switching to faux fur, in an effort to become more sustainable and support animal rights.

4. Electrical equipment

Electrical equipment covers a wide range of different items, from extremely high-value products to budget items. There is an extra element of risk involved with purchasing counterfeit electronics, as electronic products must go through stringent safety testing before they are released for public consumption. Trading counterfeit electronic products could lead to serious safety issues, yet unfortunately, 12% of counterfeit goods seized in 2016 were in this category.

5. Watches and timepieces

Watches and timepieces are items of potentially very high resale value, which makes them attractive to counterfeiters. Think of luxury brands like Rolex, Omega, or Jaeger-LeCoultre; these are highly desirable items, but at the same time, they are extremely expensive and inaccessible for the average consumer. Consequently, many buyers choose to go for a counterfeit product that closely resembles their dream timepiece. As a result, 7% of all the fraudulent items seized in 2016 were in the watches and timepieces category.

6. Medical equipment and supplies

According to Statista, 5% of all counterfeit and pirated goods seized in 2016 were in the medical equipment and supplies category. This is particularly concerning, as medical equipment is designed for a highly specific purpose, and the stakes involved in using defective goods are high. Take a recent example of counterfeit masks circulating as effective shields against the new coronavirus. More than 100,000 counterfeit 3M N95 masks were seized by U.S. customs in December 2020, masks that were destined for hospital use in Texas.

7. Makeup, cosmetics and perfumes

The beauty industry is a massive source of profit for counterfeiters, and it can often be difficult to differentiate an original product from a fake one. Makeup, cosmetics and perfumes tied with medical equipment and supplies at 5% of seized counterfeit goods in 2016. This is also a concerning figure, as makeup and cosmetics are designed to be applied directly to the body. Defective or sub-standard products can cause serious health and safety issues, and lead to serious and sometimes life-threatening allergic reactions. 

8. Toys

Counterfeiters are also taking advantage of the pressure placed on parents to provide their children with the latest toys and entertainment. In recent years, toys have become increasingly expensive, making it hard for some parents to afford their child’s much-desired toy. This means that toys and games are often pirated, and once more, these items could pose serious safety risks for children. Alarmingly, 3% of all seized pirated products were in this category in 2016.

9. Jewelry

Jewelry can fetch a very high price when resold, which is what makes this category so popular among counterfeiters: 2% of all the counterfeited goods seized in 2016 were in this category.In many instances, recognizing a real diamond from a counterfeit one is not something that can be done with the naked eye, and it takes a specialist to tell the difference. The best example is the iconic Cartier Love Bracelet, one of the most popular items for counterfeiters. There are so many replicas on the market today, and some of them are so well done, that it’s reportedly hard even for Cartier to tell the difference. 

10. Pharmaceuticals

So many people struggle to pay for healthcare and medications nowadays, and if one doesn’t benefit from healthcare insurance, the costs can go through the roof. This is a fact that counterfeiters use to their advantage, releasing sometimes dangerous and defective products into the pharmaceuticals market at a discounted price. In 2016, 2% of all the seized counterfeit goods were in this category, which is incredibly worrisome, as the side effects can be life-threatening or cause more harm than good. 

11. Media 

Media was not included in the OECD's report. However, media piracy is a major issue in the United States and worldwide. Figures from 2018 show that 24% of U.S. consumers admit to pirating movies while they are still playing in theaters. This is actually a worldwide problem -- consumers in Indonesia and Egypt, for example, admitted to pirating media content more than once per week in February of 2017.

The remaining 12% of seized pirated goods were recorded in the OECD's report as belonging to "other industries."

Get a free demo of engage™ and protect your business against counterfeited products

As you can see, counterfeiting is a common problem across a wide range of industries. For brands, this is a major issue that affects both their reputation and their relationship with their customers. 

It's not always easy to keep business protected against counterfeiters, especially not in today's largely online-based economy. However, we’ve got a solution that helps both brands and consumers steer clear of counterfeit items. Let us introduce engage™.

Our innovative app helps consumers verify their products and ensure that what they are buying is legitimate. For businesses, the app can be deployed to identify fraudulent items that may be eating into your profit margin, so that your customers know they are buying from you and not someone else. Your customers buy your products because of the high quality you provide, and they deserve the peace of mind that comes with buying authentic products. You put hard work into guaranteeing this quality, and you deserve to be rewarded for this hard work. Our app delivers on both counts.

Reach out to our team to learn more about our app and get a FREE DEMO so you can experience it for yourself.

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