A Rise in Counterfeit Goods Leads to More Than Just Lost Sales
The EUIPO has recently reported a steep rise in counterfeit goods present within the European market over the last year, an increase of nearly 30 billion euros of fraudulent products as compared to the previous year. To put this number in perspective, counterfeit products comprise nearly 7% of all of the imported goods within the EU. Some conservative estimates place the presence of these goods as accounting for direct lost sales in amounts that exceed 50 billion euros every single year, demonstrating evident gaps in effective online brand protection.
Counterfeits cause confusion amongst consumers
These cumulative reports tell a staggering story of how an increasingly significant number of lost sales are one of the many consequences of online counterfeiting, but the specific details are considerably more dire. A single fraudulent item sold can correspond to much more than a simple one-to-one amount of profit that is forfeited in a single lost sale. Counterfeit items could cause irreparable damage to a company’s reputation, to their relationship with their customers, and to the overall trust in an industry. It creates confusion and reduces consumer confidence when it comes to buying new products in the future, stifling innovation and hampering creators, especially those just entering production.
A warning to not overlook illicit activities
Companies put a good deal of energy and resources into the infrastructure needed to forge relationships with customers, suppliers and distributors — these are all indispensable elements in creating a strong and distinctive presence in the market so that brands can operate effectively and sell their products. And while these tactics capitalize on core business strategies, they may overlook the ways that brands are susceptible to illicit activities that could cause substantially more damage in lost sales. Systemic vulnerabilities to counterfeit products are difficult to track, let alone combat, illustrating the crucial need for sophisticated brand protection as a vital pillar of business strategy that should be nourished alongside the more conventional approaches.