Online shopping platforms are flooded with counterfeit products, making it more difficult for consumers to distinguish between original and counterfeit products, according to a report by Bloomberg.
Bloomberg says that this problem was particularly evident with the Korean cosmetics brand “COSRX”, whose products’ popularity in 2023 led to an increase in counterfeit versions that flooded platforms such as Amazon and TikTok Shop.
Despite Amazon’s efforts to prevent the sale of counterfeit products, including spending more than $1 billion in 2023, counterfeiters have managed to infiltrate the market, according to the agency.
Report author Amanda Moll points out that purchasing familiar products from reputable retailers such as Amazon does not guarantee their authenticity, as counterfeit products can still reach consumers.
Counterfeiting crisis
A sudden surge in demand for the COSRX serum, driven by its popularity on TikTok, led to it becoming the best-selling product on Amazon in early 2023. However, the high demand also attracted counterfeiters who produced knock-offs sold at much lower prices, sometimes Less than $9, according to the writer.
This problem is exacerbated by dynamic pricing algorithms on platforms like Amazon, which can make it difficult for consumers to determine whether they are purchasing an authentic product or a counterfeit source.
The Bloomberg report says that counterfeiting has traditionally been associated with luxury goods due to their high prices and attractive profit margins in counterfeiting. However, low-priced products are also becoming targets as counterfeiters exploit detailed market data available on online platforms, which indicates that a product is seeing an increase in popularity, prompting counterfeiters to flood the market with counterfeit versions of it.
Consumers and retailers
Bloomberg believes that the spread of counterfeit products has major implications for both consumers and retailers, as consumers must become skilled at authenticating and matching products, and examining details to avoid purchasing counterfeit products. On the other hand, brands and retailers are also taking steps to combat this problem.
COSRX has distributed information on identifying authentic products, while TikTok Shop claims to block or remove millions of suspected counterfeit items annually. Likewise, Amazon continues to remove counterfeit listings but acknowledges the challenge of completely removing counterfeit products from its platform.
Bloomberg notes that affiliate marketing further complicates the landscape, as influencers and media companies promote products, sometimes without verifying their authenticity. This creates a scenario where consumers can be led to purchase counterfeit goods based on seemingly credible recommendations.
While brands and retailers seek to combat this problem, the complexity of online markets means that counterfeit products can still reach consumers. This underscores the importance of consumers being careful and informed when making online purchases to ensure they are purchasing authentic products, as Bloomberg recommends.
