Counterfeit Goods Threaten Online Shopping Growth

Counterfeit Goods Online: Key Insights 

• Endangered Consumer Safety: The rise of counterfeit goods on eCommerce platforms, including hazardous items like fake water filters, has created serious concerns about consumer safety, driving calls for tougher regulations.

• Calls for Accountability: Retail organizations are pushing for stricter measures on platforms like Amazon, as the ongoing surge of counterfeit and potentially harmful products puts consumers at risk.

• Fake Websites Host Most Counterfeits: Counterfeit goods are most frequently sold on fake websites mimicking real brands, followed closely by large U.S. marketplaces such as Amazon and eBay.

The rise of counterfeit goods, now easily accessible through eCommerce platforms and social media, is a growing threat as the holiday season approaches. 

With platforms like Amazon, counterfeiters can sell everything from fake designer handbags to hazardous products like water filters filled with newspaper instead of proper filtration materials. 

Dangers of Fake Products 

As we covered last month, American Eagle Outfitters recently sued Amazon for allowing third-party sellers to market counterfeit Aerie products. This issue isn’t new for Amazon, which is currently under investigation by the U.S. Consumer Product Safety Commission for failing to curb counterfeit sales, even after consumer complaints.

Retail groups, including the American Apparel & Footwear Association (AAFA), are pushing for the SHOP SAFE Act, which would make platforms like Amazon liable for counterfeit sales unless they take reasonable measures to prevent them. 

The counterfeit trade has dangerous implications, with hazardous materials in phony products risking consumer health. A survey revealed that 36% of the 47 most-seized counterfeit products by Customs and Border Protection contained toxic chemicals and heavy metals.

Where Are the Most Counterfeit
Products Sold Online? 

According to a 2023 Marq Vision survey, the most common locations for counterfeit goods are fake websites designed to mimic legitimate brands:

• Nearly 59% of online brand advocates reported encountering counterfeit websites, with many consumers either receiving low-quality goods or nothing at all.

• Large U.S. marketplaces like Amazon and eBay followed closely behind, with 56% identifying them as hotbeds for counterfeit sales.

• Non-U.S. marketplaces came next at 41%, while social media platforms, where identifying counterfeits can be more challenging, accounted for 25% of counterfeit sales activity. 

Counterfeit Goods Online: Closing Thoughts 

The booming counterfeit industry is driven by the sheer scale of marketplaces like Amazon, where many third-party sellers from China can bypass copyright regulations. U.S. Customs is overwhelmed by the flood of dupes entering the country, even as retail groups lobby for more enforcement and stricter penalties. 

As counterfeiting remains a persistent issue, online platforms face increasing scrutiny from both consumers and regulators. The surge of counterfeit goods, exacerbated by platforms like Shein and Temu, poses a significant risk to legitimate businesses and consumer safety, with no immediate solution in sight.

Sources: NH Journal, ECDB