Shaking the foundation of the cosmetics industry

By Olivia Cain

“The most beautiful makeup of a woman is passion. But cosmetics are easier to buy.” Yves Saint Laurent.

What Mr Saint Laurent didn’t know at the time of this quote was how right he would turn out to be. Cosmetics are not just easier to buy nowadays, with dozens of high street stores stocking huge ranges of products that were once the preserve of the rich and famous, but they are also easy to fake, with the cosmetics industry today being one of the most affected by counterfeiting.

A recent OHIM (the EU’s Office for Harmonisation in the Internal Market) study focused on the cosmetics sector, found that brand holders lose around €4.7 billion (£3.6 billion) of revenue annually from counterfeit cosmetics. The research also found that counterfeiting in this industry led to around 80,000 lost jobs and €1.7 billion (£1.3 billion) in lost government revenues.

But it’s not just the loss in revenue that’s the problem. It’s the loss of consumer trust in the real cosmetics brands. Very few people knowingly purchase counterfeit goods – most actually believe they just ‘got a good deal’ on a product, so there could be brand and reputational damage by association.

The danger of counterfeit cosmetics is astounding: mercury, lead, arsenic and cyanide have all been found in analyzed counterfeit cosmetics made in China. As you can imagine, these ingredients will cause allergic reactions, rashes and even burns – and all those side-effects would prevent a shopper from buying the [real] product ever again. They would believe that they were either allergic or they would question the quality of the brand – and more than likely they would share their experience with friends, social media and on ratings websites.

Just this month, the City of London police issued a national alert after discovering a shipping container filled with more than 4,700 counterfeit versions of MAC products, including lip gloss, bronzer and eye shadow. These products were mostly made in China and sold to Eastern Europe and the UK through online marketplaces such as eBay and Amazon. This is no surprise as it’s widely estimated that around 80% of listings on some marketplace sites are for counterfeit goods.

Counterfeit goods now make up 10% of global trade, with $1.7 trillion (£1.1 trillion) in counterfeit goods estimated to have infiltrated international markets. If you’re wanting to polish up on your online counterfeit knowledge, please get in touch with us or go to the anti-counterfeiting area of our website.