The Real Costs of Fake Beauty: Combatting Holiday Counterfeits

The holiday season is nearly upon us, and brands across the cosmetics industry are eager to make shopping events like Black Friday and Christmas a major success. Here’s the problem: counterfeiters have the same idea.

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Counterfeiting has developed beyond the obvious knock-offs of the past. Today’s fakes are so convincing that even the most cautious shoppers can be confused by a counterfeit. Even people working at the legitimate company can struggle to identify a fake.

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This counterfeiting is putting the reputation of legitimate brands into serious jeopardy. Recent research into cosmetics counterfeiting has found that, when consumers unwittingly purchase a counterfeit, their negative experience often primarily affects the authentic brand. 

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Trust in the brand can vanish, their reputation withers away, and many consumers even take to social media to share their negative experience. And, at this pivotal moment in the shopping calendar, promising brands are at risk of having their future success thrown out.

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Counterfeiters Know How to Fool Cosmetics Consumers

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Two things are certain: cosmetics consumers don’t want fakes, but fakes are finding them anyway. Findings from our latest research into cosmetics counterfeiting, The Real Costs of Fake Beauty, shows us that cosmetics consumers are not seeking counterfeit products voluntarily, but are essentially being tricked into buying them. 

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A staggering 70.8% of our survey respondents believed the item they were buying was authentic, when it was really a counterfeit.

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Consumers avoid fake cosmetics largely because they know the risks—these are low-quality items that fail to deliver results at best, and dangerous products that can harm their health at worst. Dangerous substances can regularly be found in fake cosmetics like lead, mercury, and other heavy metals, as well as dangerous bacteria.

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In fact, 30.1% of consumers reported experiencing minor irritation or discomfort after using counterfeit cosmetics, and another 9.1% suffered severe reactions or health issues. It should come as no surprise that shoppers are committed to purchasing authentic beauty products, when this is the risk they face.

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And yet, despite this clear preference for genuine items, counterfeit cosmetics are still making their way into consumers' hands. So, how is this happening? 

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Counterfeiters have a knack for developing smarter, more sophisticated ways to trick customers within online spaces. They leverage the power of social media platforms to find and target potential buyers, using stolen copyrighted content to create a facade of legitimacy. 

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Once they've hooked a potential buyer, counterfeiters often redirect shoppers to third-party marketplaces or imitation websites to finish the sales process. Here, they can take advantage of generative AI to fabricate positive customer reviews to make the items look popular and trustworthy. These reviews are very persuasive, as seen by the 49.8% of our survey respondents who stated they rely on them to verify the product before purchase.

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Counterfeiters also use techniques like desktop cloaking to evade brand protection efforts. This means they can display authentic-looking websites and product pages to consumers while hiding their illegal activities from brands and regulators.

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These strategies are extremely effective, resulting in unwitting consumers purchasing counterfeit products despite their best efforts to avoid them. 

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The Blame Falls on Brands, Not Counterfeiters

When counterfeit cosmetics disappoint or harm consumers, it's the legitimate brands that bear the brunt of the backlash. 

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This finding from the report will be incredibly frustrating for brands. Instead of holding counterfeiters accountable, many customers who fell for a convincing counterfeit will direct their anger toward the brands they believed they were purchasing. 

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Per our findings, 29.4% of consumers said they wouldn't buy from the brand again after encountering a counterfeit, and 23.6% trust the counterfeited brand less after the experience.

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This misplaced blame stems from a simple truth: consumers trust brands to deliver quality and authenticity. When that trust is broken, regardless of who is at fault, it's the brand's reputation that suffers. Customers expect brands to protect them from counterfeits, and when fakes slip through the cracks, it erodes the hard-earned loyalty that companies have built over years.

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The impact of this reputational damage is amplified during major shopping events like Black Friday and Christmas. These are pivotal moments when brands have the opportunity to attract new customers and reinforce relationships with existing ones. Or, these same customers can instead get their hands on fake products instead.

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Brands looking at this research should also bear in mind who these respondents are. Our survey captured only those consumers who were aware that they had purchased a fake. Consider the untold number of shoppers who bought counterfeit cosmetics without ever knowing it—and question just how strong their reactions are to the brand whose low-quality counterfeits they bought and used. 

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When Counterfeits Go Public, Customers Take to Social Media

When consumers realize they've been duped by counterfeit cosmetics, they don't stay silent—many of them turn to social media to voice their frustrations. 

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Our research found that 26.2% of shoppers who bought a counterfeit shared their experiences to warn others. Many of these will warn their direct friends and family about what happened, while others will take to social media to voice their concerns to a much larger audience. These posts can quickly gain traction, even going viral if they catch the right attention, spreading negative perceptions about the brand far and wide.

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Especially during the holiday season, when shoppers are highly attentive to reviews and recommendations, the impact of negative word of mouth is even more pronounced. Brands risk not only immediate sales but also long-term trust and loyalty.

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There’s a risk that the ripple effect doesn't stop with consumers—that it could extend to retailers as well. Shop owners—both online and brick-and-mortar—who hear about an up-and-coming brand associated with customer harm may think twice about stocking their products. They don't want to risk their own reputation by offering items that could disappoint or injure their customers.

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Protecting Your Cosmetics Brand This Holiday Season

It's time for cosmetics companies to take action. Counterfeit cosmetics are harming consumers and eroding their trust in brands fast, and with the holiday season nearly upon us, brands must act now to protect their reputation.

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Here’s the positive news: artificial intelligence offers a real solution.

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Marq AI deploys a service able to find and report even the most well-hidden fakes, whether they’re for sale in online marketplaces, being advertised on social media, or even sold through private messaging apps. Coupled with our groundbreaking U.S. Test Purchases program, MarqVision is able to detect, verify, and enforce fake cosmetics in days, not weeks, because every day counts when a bad experience with a counterfeit could damage your reputation--especially during this critical shopping season.

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You can learn more about our research into cosmetics counterfeiting, including shopping habits, consumers’ beliefs and opinions, and their reactions to counterfeits by downloading our report here. For more information about our anti-counterfeit solutions, please visit this page.