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Online counterfeit sales grow 15.6 percent

October 20, 2015

The figure for 2014 shows that “online counterfeiting and digital piracy can pose a threat to retail”.@ cropped1

LP Portal reported on the findings from UK-based NetNames, an “internet brand protection specialist” that found that in 2014 online e-commerce channels saw sales of counterfeit goods grow by 15.6 percent. The company notes that the “serious threat” posed to retailers and the channel is causing a “huge problem” for the market.

Additionally, the report “points to China as the source for much of the counterfeiting”, with around 70 percent of fake goods seized worldwide said to “originate in China” thanks to the nation’s “abundance of raw materials and inexpensive labour”. While only one in 28 buyers of counterfeits “did so intentionally”, the sale of such goods takes around $1 trillion (€879 billion) from the global economy per year.

The report also cites the rise in “fake websites, online auctions and digital piracy”, which have been “spurred by a fragmented internet ecosystem” where “anyone can register a domain name quickly and anonymously”. In turn, piracy is said to make up around 24 percent of the world’s internet traffic, with counterfeiting “not the only threat posed by the unregulated online environment”, as phishing and cybersquatting are also areas to “safeguard against”.

Gary McIlraith, CEO of NetNames, commented: “Brands have a responsibility to safeguard their customers. Revenue can be diverted by shoppers unknowingly purchasing counterfeit items online and a brand’s reputation can be damaged when shoppers—or their partners—are disappointed with the quality of the product.

“For online retailers and luxury brands, safeguarding genuine customer traffic and protecting the legitimate route-to-market is of paramount importance to maximise the opportunities that the online channels offer to grow sales.”

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