The Fashion Law Exclusive - A study by MarkMonitor reveals that while the number of online shoppers seeking out counterfeit goods is not increasing very significantly, the number of shoppers being duped into purchasing fakes is growing. In fact, approximately one in six online shoppers are tricked by websites selling counterfeit goods and one in ten online shoppers land on rogue sites (sites selling counterfeit goods) in their search for authentic goods.
MarkMonitor, a brand protection company, which helps many major brands protect themselves from online counterfeiting, fraud, piracy and cybersquatting, released its annual Shopping Report study last week and the findings present some major warnings for fashion houses. According to the report, along with the rise in websites offering designer goods at discounted prices comes an increased risk that consumers looking to purchase authentic goods are falling victim to counterfeiters that have “camouflaged themselves” as legitimate. Moreover, the 2014 report, which analyzed data from nearly nine million online sessions from roughly 280,000 shoppers, states: "Most shoppers are trying to purchase legitimate goods from brands they’re familiar with and loyal to. But they’re also looking for the best deals on these goods, which is why a shocking number of consumers end up on sites selling counterfeit goods."
A number of factors coupled together makes online shopping particularly problematic for luxury brands. The report found that the number of bargain hunters has grown substantially and that "professionalism of rogue sites" has also increased. According to the report, "Most counterfeit goods are priced to appear as legitimate goods on sale. Discounts are often offered at 25 to 50 percent, which, while steep, are comparable to end-of-season or 'blowout' sale rates. Because these prices are plausible, bargain hunters are lured into snatching up counterfeit goods thinking they’re purchasing legitimate goods." As a result, counterfeit-selling sites are increasingly able to dupe consumers.
Given such findings, MarkMonitor suggests that brands develop proactive strategies to ensure they are protected on the web. In particular, MarkMonitor sets out three important steps: Buying search terms such as “discount,” “outlet,” and other bargain-related terms; registering domain names with bargain-related themes (“[brand]outletstore.com” or “discount[brand].com”); and considering expanded Internet namespace with the emergence of new top-level domains such as .discount and .clothing.
This report comes on the heels of a 2013 report by VoucherCloud, a UK-based mobile coupon/voucher app, which held that while counterfeits are still an enormous business, consumers are increasingly shunning counterfeits in favor of the real thing. According to VoucherCloud's study, consumers cited the increased availability of discounted name-brand items as a key reason for their varied shopping habits.
And speaking of the global market for counterfeits, the U.S. Customs and Border Protection reported this past March that the value of counterfeit goods seized last year rose by 38.1%, from $1.2 billion in 2012 to $1.7 billion last year. You may recall that just last month, Customs announced that it had seized 198 counterfeit Hermès Birkin handbags at the Port of Savannah, Georgia, which they claim, if authentic, would have had an estimated retail price of nearly $2 million. A recent article by Bloomberg looking to the frequent advertising of counterfeit goods on Facebook, put the current scenario into perspective quite well: "That $2,000 Louis Vuitton handbag advertised on Facebook for just $239? Yeah, it’s too good to be true."