While the word “counterfeit” may conjure up images of fake cash and copycat handbags, the pharmaceutical industry – and with it, the fight against COVID-19 – has been significantly affected by illicit goods. In a major operation, Interpol revealed in June that it intercepted global counterfeit rings, closing more than 100,000 bogus online pharmacies, making nearly 300 arrests, and seizing more than $20 million worth of counterfeit items in the process. 

Mainly targeting counterfeit COVID-19 testing kits, this operation followed other examples. These have included the discovery of counterfeit networks in China and South Africa and the production of fake vaccines from simple, widely available ingredients such as saline solution and mineral water. Despite these law enforcement breakthroughs, the world’s fight against COVID-19 is being undermined by a booming trade in counterfeit PPE, COVID-19 testing kits, vaccines, vaccine passports and other products that are contributing to the spread of the virus

The appeal of fake vaccines

Pharmaceutical markets are worth more than $1 trillion annually, making them an attractive target for counterfeiters, who often trade anonymously via online auction sites or pharmacies. Beyond the general lure of this lucrative market, there are many reasons why counterfeit COVID-19 vaccines, in particular, are emerging, including the high and instant demand – which has outstripped supply during the pandemic. 

This has not been helped by the expense of developing vaccines at a national level, which has made access difficult, especially for poorer countries, and which has ultimately led to unequal global access to vaccines, with much of the world’s supply being controlled by the most powerful countries. Meanwhile, the relative ease of producing a fake, which might potentially only be detectable as inauthentic when it fails to protect someone from the virus, means the barrier to market entry is relatively low. 

The consequences of consuming fake products in this context can be significant, and there are many historical cases of fake pharmaceuticals, such as cancer and anti-malaria drugs, causing death. Other than being potentially toxic, the fake versions may not contain any of the active ingredient, or may consist of a diluted amount that fails to have the intended effect. 

For other COVID-related products, such as fake vaccine passports and testing kits, the health implications may be more indirect. There, demand is arguably driven by a desire to get back to “normal” life, despite the potential to infect others and disrupt efforts to reduce COVID-19 transmission. While the impact of counterfeiting on the stubborn persistence of the pandemic is difficult to measure (and is more of a factor in some countries than others), it is likely to be playing a role in new waves of the virus, and having a detrimental effect on the global fight against COVID-19.

Counteracting the threat

Counterfeiters present a shifting threat, and by nature of the fact that they operate in a largely digital capacity, they can be difficult to detect. There are, however, potential countermeasures for dealing with the threats they pose. Some technological developments, such as the rise of vast e-commerce marketplaces, have exacerbated the breadth of counterfeiting activities. However, other advances, such as radio frequency identification tags and blockchain technology, can help to distinguish genuine products and confirm their provenance. Furthermore, just as counterfeiters can present a moving target for prosecutors, genuine producers can make their products harder to replicate by regularly changing product and packaging designs, and by educating consumers on how to spot a fake. 

In many countries, the vaccine rollout is heavily orchestrated and regulated, meaning it should be relatively straightforward to avoid counterfeit vaccines at the point of consumption by sticking to authorized channels, providing they do not infiltrate the genuine supply chain, such as at distribution center level. In late 2020, as vaccination programs began, authorities warned of the threat posed by counterfeiters who were likely to attempt infiltration.

It may, however, be that consumers in some countries are willingly seeking out COVID-related counterfeit products. While it is good news that some of the world’s superpowers are now aiding in the global supply of vaccines, customers need to be educated on the dangers of buying counterfeits. Additionally, the purchasing of counterfeit products often funds other forms of organized crime.

Given that counterfeiters of vaccines and other related products may infiltrate the supply chains of genuine producers, firms also need to take a closer look at their own practices and increase their supply chain vigilance. For example, it may be wise to work with a smaller number of local, trusted suppliers and to limit supplier involvement in product development in order to minimize the risk of design and production knowledge leaking outside the firm. 

Arguably the most effective action against counterfeiting in general will be a collaborative one. This includes supply chain partners, rival firms, consumers and authorities working together to detect counterfeits, share intelligence and consistently prosecute offenders. Just like a global response to the direct threat posed by the virus is needed, a global response to the scourge of counterfeiting is needed. This underworld threat may otherwise delay the world’s return to (new) normality.

Mark Stevenson is a Professor of Operations Management at Lancaster University.

Move over Revolve. The biggest influencer campaign of the moment is not pushing attire for previously-postponed weddings or for long-awaited Côte d’Azur holiday wardrobes. It is one that aims to persuade young Americans to get vaccinated. The New York Times revealed last week that the White House has enlisted more than fifty influencers – from heavily followed figures on gaming platform Twitch to those on TikTok, such as 17-year old creator Ellie Zeiler, who boasts upwards of 10 million followers – to help promote COVID-19 vaccinations. In furtherance of the broad social media push, influencers have shared question-and-answer sessions, and taken part in Instagram live events with the federal government’s top infectious disease expert and President Biden’s chief medical adviser Dr. Anthony Fauci, while singer Olivia Rodrigo paid a visit to the White House to call on young people to get vaccinated, and posted a selfie with the president with a similar message. 

A couple of months before 18-year-old Rodrigo’s heavily-publicized visit (which was not only believed to help boost vaccination rates among teens but also led to a 200 percent spike in spike in searches for vintage Chanel, according to Lyst, a nod to the pink S/S 1995 Chanel suit that the star wore), President Biden and Dr. Fauci aimed to reach young Americans by hosting a YouTube town hall with make-up artist Manny MUA, animal expert channel Brave Wilderness, and beauty YouTuber Jackie Aina – who collectively boast some 28 million YouTube subscribers – to discuss vaccinations. 

Still yet, the Times reports that as part of a larger effort, the White House has enlisted New York-based influencer-led creative agency Village Marketing and COVID vaccine campaign Made to Save for the specific purpose of enlisting influencers to back the cause. 

Not the First Push of its Kind

While certainly noteworthy, the move is, however, not the first of its kind. In fact, it comes less than a year after the United Kingdom government opted to enlist influencers in promote a COVID-specific endeavor. Not unlike how department store chain Nordstrom hired a handful of established social media figures to spread the word about its safety measures in an attempt to lure consumers back not stores last year, the UK relied upon several social media influencers and reality television stars to help promote the National Health Service’s test and trace service, a system that aims to track contact that an individual who tests positive for COVID-19 has had in other to prevent further spreading of the virus. 

When the NHS’s system failed to reach its target for the ninth week in a row last year, the government opted for a new strategy, and brought in Love Island stars Shaughna Phillips, Josh Denzel and Chris Hughes, to help encourage the public to take part in the service. Phillips, who has 1.5 million followers on her Instagram, posted a photo of herself, reminding her followers that “the best way for us all to get back to doing the things we love” is by getting tested for coronavirus. She alerted her followers that the NHS’s service is “totally free, quick and is vital to stop the spread of coronavirus.” Meanwhile, the World Health Organization has been relying on influencer marketing techniques of its own in order to promote coronavirus messaging since last spring. 

Interestingly, the practice of looking to influential figures to help promote the public good, including by way of vaccinations, dates back much further that 2020 and the COVID-19 pandemic.

“The power of celebrity had been harnessed in vaccination campaigns many times,” according to Western Sydney University School of Business professors Michelle O’Shea and Sarah Duffy Lecturer, School of Business, and Patrick van Esch, a Senior Lecturer in Marketing at Auckland University of Technology’s Business School. Most famously, they point to Elvis Presley, who was enlisted to receive his polio vaccine, as documented by members of the press on the set of “The Ed Sullivan Show” in October 1956 “as a way of encouraging take-up among teenagers.” 

In terms of the efficacy of these celebrity endorsements, O’Shea, Duffy, and van Esch say that research has shown that “celebrity endorsements can trigger biological, psychological and social responses in people that make them more trusting of what celebrities say and do,” which is precisely why brands regularly tap big-name figures to serve as the face of their brand and/or endorse their products – whether it be cologne or cars. That same type of response applies to celebrities’ “endorsement of health information,” the academics assert, noting that “neuroscience research supports these explanations, finding that celebrity endorsements activate regions in the brain involved in making positive associations, building trust and encoding memories.” In short: famous figures are able to sell … vaccination campaigns, included. 

As for the parties involved in these campaigns, Frankfurt Kurnit Klein & Selz attorney Jordyn Eisenpress notes that “the Federal Trade Commission’s endorsement guides require clear and conspicuous disclosure of material connections (i.e., connections that are not reasonably expected by the audience that might materially affect the weight or credibility of the endorsement). ” In light of “the focus that the federal government has had on influencer disclosures over the last few years,” Eisenpress says that “it will be interesting to see whether the White House will require and enforce FTC-type disclosures here.”

Kendall Jenner and one of her agencies have landed on the receiving end of a new lawsuit, with Italian fashion brand Liu Jo S.p.A accusing the reality television star and mega-famous model of “breaching an agreement to provide modeling services to Liu Jo.” According to the complaint that it filed in a New York federal court on Monday, Liu Jo S.p.A claims that it entered into a contract with Jenner, 25, during the summer of 2019 for the model to take part in two photoshoots for the brand, one for Liu Jo’s Spring/Summer 2020 campaign and one for Liu Jo’s Fall/Winter 2020 campaign, among other obligations, such as “perform[ing] certain social media activities and conduct[ing] interviews,” in exchange for $1.5 million plus a 20 percent service fee. 

After signing off on the deal in July 2019, and on the heels of Liu Jo “promptly [making] all required payments as scheduled in anticipation of Ms. Jenner’s performance, totaling $1,350,000 to date,” Liu Jo asserts that Jenner traveled to Europe to shoot the Spring/Summer 2020 campaign photoshoot, thereby, “fulfilling her obligations for one of the two agreed-upon photoshoots,” which the brand asserts was just “one of the many obligations she was required to fulfill under the agreement.”

Things started to go downhill after the completion of the first photoshoot, Liu Jo alleges in the complaint, which also names Jenner’s agency Society Model Management and its parent company Elite World as defendants. “Due to the early stages of the Coronavirus pandemic and related travel restrictions,” Liu Jo claims that in March of 2020, it “offered to reschedule the second photoshoot so that it could take place in the Fall of 2020 for Liu Jo’s Spring/Summer 2021 campaign.” However, that second shoot never came into fruition, the brand asserts. After Jenner “failed to provide Liu Jo with definitive responses to [its] proposals” as to alternative dates and locations for the second shoot, and then reneged on the agreed-upon date, Liu Jo contends that “by late September 2020, it became clear that Ms. Jenner had no intention to fulfill her obligations under the agreement by performing the second photoshoot [on a rescheduled date in] October 2020.”

When “Jenner continued to fail to respond to urgent requests and communications relating to the logistics of the mid-October 2020 proposed photoshoot,” a representative for Liu Jo informed Jenner that “she was in breach of her obligations under the agreement.” In a response on October 7, 2020, Liu Jo claims that Jenner asserted that she “was not in breach of the agreement, and that it was ‘impossible’ for Ms. Jenner to travel to Italy in the Fall of 2020,” despite traveling to Italy for a Versace photo shoot a month prior “during the same time period the parties contemplated for the second [Liu Jo] photoshoot to occur.” 

Doubling down on its claims that Jenner acted in bad faith, Liu Jo asserts that while Jenner “also claimed that she was unable to travel to Italy due to her health concerns relating to the Coronavirus pandemic,” the model was “at the same time … repeatedly reported to be violating CDC guidelines by engaging in multiple international non-essential trips and hosting large parties with her friends.”

Ultimately, Liu Jo claims that “despite all best efforts and multiple proposed alternative arrangements for the second photoshoot, Liu Jo was consistently met with silence or rejection on the part of Ms. Jenner.” When the model “did respond to Liu Jo’s proposals, [which was] generally weeks or months after ignoring multiple emails and phone calls, she consistently rejected Liu Jo’s attempts to reschedule the photoshoot,” including by “claiming that it would be ‘impossible’ for her to travel to and work in Italy.”

“In sum,” Liu Jo argues that “Ms. Jenner made no good-faith effort to reschedule the second photoshoot or perform her obligations detailed in the agreement, despite Liu Jo’s flexibility and multiple proposed alternatives, and despite Liu Jo making payment to Ms. Jenner for services she refused to render.” Due to Jenner’s “refusal to negotiate in good faith,” Liu Jo alleges that it was “forced to find replacement models and restructure its entire Spring/Summer 2021 photoshoot – at great expense.” More than that, Liu Jo asserts that “as a result of Ms. Jenner’s dilatory and bad-faith actions, [it] has been forced to file this lawsuit.” 

With the foregoing in mind, Liu Jo sets out claims of breach of contract, breach of good faith and fair dealing, and unjust enrichment, and is seeking damages “in an amount to be proven at trial, but not less than $1.8 million plus interest, as well as Liu Jo’s attorneys’ fees and litigation costs, and any additional damages and such other relief as the Court deems appropriate.” 

A spokesperson for The Society Management told TFL, “This suit is without merit. The Society Management, on behalf of Ms. Kendall Jenner, has continually offered Liu Jo alternative dates and locations to fulfill an agreement that was forced to be delayed because of the coronavirus pandemic. Jenner has willingly offered to complete services honoring her commitments.”

The case is Liu Jo, S.P.A. v. Kendall Jenner, et. al., 1:21-cv-06543 (SDNY).

Chanel’s revenues fell by 18 percent on a year-over-year basis to $10.1 billion dollars in 2020 due to widespread closures of its network of brick-and-mortar stores, the French fashion house stated in its latest annual report, revealing that profits were down by 41.4 percent to $2.05 billion compared to last year. While Chanel’s sales dropped by a larger percentage than rivals like LVMH (down 17 percent for 2020) and Hermès (down 6 percent), the privately-held brand, which began reporting its financials in 2018, stated that it is “bouncing back quickly,” with revenues for the first half of 2021 increasing by double-digits compared to its 2019 pre-pandemic numbers, driven largely by consumers in China and the U.S.

Detailing its sales slumps by region, Chanel reported that revenue in Asia Pacific was down by 3.1 percent to $5.26 billion for the year, followed by the Americas, which fell by 15 percent to $1.97 billion, and Europe, which saw sales plummet by 36.4 percent to $2.89 billion. Taken together, Chanel’s double-digit dip follows from its decision to “stick to its long-held strategy of not selling fashion, watches and fine jewelry online,” Reuters reported on Monday even as other luxury brands leaned on e-commerce to make up for stores that were temporarily shuttered as a result of pandemic lockdowns. Instead of looking to online sales for these categories, Chanel opted to “turn its sales assistants into personal shoppers showing collections to clients, organizing fitting sessions and special deliveries at home, and keeping in touch through a new app,” Chanel’s finance chief Philippe Blondiaux, told the publication. 

Despite “a highly disrupted environment that led to the closure of its boutique and manufacture network, and the suspension of international travel,” Chanel says it “demonstrated strong resilience across all product lines in 2020.” The 111-year-old brand pointed to “strong growth in online sales” in its Fragrance & Beauty division – particularly skincare, which had “a notably strong performance within the Beauty segment” – as helping to “partially offset the impact from the decline of travel retail.” E-commerce sales for Chanel’s cosmetics and fragrances grew by 113 percent in 2020 and are up by 57 percent this year. It also noted that Watches and Fine Jewelry sales were “resilient.” 

Blondiaux asserted on Monday that Chanel’s rebounding sales are not merely the result of pent-up demand. “We are beyond what some have called revenge buying, [and] believe it is a deep and lasting momentum, which may not be true for all the players in the luxury industry, but it is true for the big brands that continued to invest, as we did.” Chanel funneled $1.12 billion in cash into its “retail [outposts], offices, manufacturing and logistics, etc.” in 2020, in what it calls “an all-time high in its history.”

And in line with an increasingly common practice among brands across the board, which have been including a growing focus on ESG in their annual reports, Blondiaux stated that “in keeping with our long-term approach and commitment to sustainable business, we also launched our strategy to tackle climate change through CHANEL Mission 1.5°,” noting that “the business has made early progress against the science-based targets we have set, as we look to accelerate the move to a lower carbon economy and help protect the world’s most vulnerable communities and ecosystems from the impacts of climate change.” 

On the pricing front Blondiaux stated that while Chanel has not hiked up its prices so far this year, it has not ruled it out. “This may happen in the second half of the year – in line with [Chanel’s] policy of reviewing prices worldwide twice a year.” The brand boosted prices twice in 2020, citing “the consequence of recent significant exchange rate fluctuations between the euro and certain local currencies.” And reflecting on the enduring M&A developments in the industry, Blondiaux distanced Chanel from the trend, telling Reuters that while the pandemic has “exposed the divide between healthier and weaker luxury brands and [that] may accelerate consolidation in the sector,” Chanel does “not have any M&A ambitions,” from either a buying or selling perspective.

Forget Hermès, Ferrari, Pfizer, and Moderna for a moment. Another company did terrifically well during the pandemic: Roblox. The online game platform revealed last year that its usage surged 40 percent in March 2020, alone, as kids were shut indoors amid the onset and escalation of the COVID-19 pandemic in the U.S. Fast forward a little over a year, and Roblox  – which currently boasts a market cap of $52.14 billion – revealed in May that its revenue for the first quarter of the year reached $387 million, up 140 percent on a year-over-year basis, while its daily active users rose 79 percent to 42.1 million. Those users, which are not just kids stuck at home from school and extracurricular activities, spent 9.7 billion hours on the platform in the first three months of 2021, alone, up 98 percent compared to the same period in 2020. 

Given the sheer level of activity and engagement at play, it is no wonder that brands are rushing to find ways to tap into the swiftly-growing company and the metaverse more broadly. A mashup of the words “meta” (which means beyond) and universe, metaverse refers to a virtual-reality space in which users can interact with a computer-generated environment and with other users – or as Nike’s Global Director of Technology Innovation Eric Redmond describes it, the metaverse is “the all-encompassing space in which all digital experience sits.” 

“The full vision for the Metaverse remains hard to define, seemingly fantastical, and decades away,” according to Matthew Ball, the Managing Partner of EpyllionCo and a venture partner at Makers Fund, who asserted early last year that “the pieces have started to feel very real.” And that development has been accelerated by the pandemic, which has had what Reed Smith LLP’s Stacy Marcus and Deborah Bessner say are “immeasurable effects on consumers and how they engage with brands, with the elimination of in-person consumer interactions for nearly a year.”

The result has been an increased interest in all things digital, the metaverse included. “Front and center of the Roblox story, for one, is “our vision for the Metaverse,” Roblox’s VP of brand partnerships Christina Wootton told AdWeek in April, noting that it is where “people seamlessly get together and interact in millions of 3D virtual experiences, representing the future of how people learn, play, work, consume entertainment, try on and shop fashion, and interact with brands.” 

Given the overarching shift to online activities and experiences, a growing number of brands are “taking consumers’ entrance into the metaverse one step further by developing virtual worlds that allow the consumer to engage with the brand in a whole new way,” Marcus and Bessner claim. 

Gucci, for instance, debuted a virtual two-week event called “Gucci Garden Experience,” which the Italian fashion brand rolled out in collaboration with Roblox in May. “Following its first footsteps on Roblox where Gucci brought some rare items to the platform last year,” Gucci unveiled the Garden Experience, which it described as a play on the “immersive multimedia experience” that it previously opened in Florence, Italy to “explore and celebrate the house’s inimitable creative vision.” By pairing with Roblox, Gucci brought the experience to a larger pool of people, enabling “visitors [to] immerse themselves” in creative director Alessandro Michele’s “creative vision and his multifarious inspirations, and share the captivating experience of the exhibition with their friends.” 

It was precisely in connection with this experiment that Gucci launched an array of digital assets, such as the online-only Dionysus bags that sold for upwards of $4,000 (i.e., more than the physical bags, themselves) and made headlines in the process

Around the same time, skincare brand SK-II made its debut in the metaverse with SK-II CITY, a mini virtual world that was inspired by the streets of Tokyo and that consisted of “a virtual gallery where a collection of six animated films based on the lives of Olympic athletes and promises a behind-the-scenes tour of the making of the films, as well as a mall,” according to Cathy Hackl, a futurist and chief metaverse officer at Futures Intelligence Group, who told Vogue Business that the SK-II City launch marked “one small step into the metaverse for SK-II, but a giant step for luxury brands,” many of which have not (yet) entered the space. 

And still yet, in March, Burberry tried its hand in the virtual space, launching an interactive replica of its flagship Ginza store online. For one month, the British brand enabled consumers to “navigate themselves around the 3-floor virtual store and purchase items from [its] Spring/Summer 2021 collection by selecting digital icons,” according to a release from Burberry, which said that the virtual venture is the latest in its regular quest to “push the boundaries through creativity, [and] explore the relationship between physical and digital experiences to create exciting new concepts for its community and enhance personalized luxury commerce.”

Hardly just a place to play games or engage with (and purchase) virtual fashion, the metaverse is “a living experience that exists consistently for everyone and in real time,” Ball stated, and in its current form, the “worlds and experiences” that it provides “have helped brands stay connected to consumers throughout the pandemic.” While much of the emphasis of such digital ventures has centered on connecting with consumers during the pandemic, Marcus and Bessner contend that these virtual worlds and experiences have enduring benefits. After all, things like virtual stores “are easily changeable and can adapt more quickly to consumer preferences and trends than a brick-and-mortar store can,” and it goes without saying that “the reach of a virtual world and experience goes well beyond that of a physical one,” making such initiatives attractive even after the world continues to reopen and COVID-related restrictions are eased.

“While after more than a year of lockdowns and quarantines, consumers may be ready to interact with brands,” they note that it is, nonetheless, “clear that the virtual brand worlds and interactions are here to stay.” 

As for Roblox, it is aiming to be far more than merely a gaming platform. Roblox CEO David Baszucki says in a recent “Axios on HBO” interview that that the metaverse is where Roblox sees its future, with future opportunities for the company potentially coming by way of “education and even for the workplace.” Or as CNBC’s Steve Kovach put it, Roblox aims to be more than a gaming platform that “that slurps up your hard-earned dollars for virtual items.” The company may be more aptly likened – for better or worse – to “a futuristic Facebook.”