Popular e-Commerce Platforms Flooded With Counterfeit Health and Beauty Products

New research from OpSec Security, Inc. reveals that counterfeiting has expanded beyond high cost health and beauty products, such as luxury fragrances, into everyday personal care items, such as toothpaste, shampoo and nail polish.

Obviously, these fake goods extract an enormous economic toll, pose a threat to brand reputation and present a serious risk to consumer safety, as well.

OpSec used its proprietary internet monitoring platform to identify listings of health and beauty products on business-to-business (B2B) trade boards and business-to-consumer (B2C) trading platforms within the following categories: mascara, nail polish, shampoo, razors, men's cologne and women's perfume. By monitoring the key Suspicious Behavior Indicators characteristic of dubious sellers, OpSec found that:

Many dubious sellers offer not only customized packaging but also customized products to supply any brand name product in massive quantities.

The Asia-Pacific region, in particular, is notorious for the production and sale of counterfeit health and beauty products. OpSec's study found that 75 percent of B2B listings were from sellers based in China. For B2C platforms, the top three countries with the most listings were from Hong Kong, China and Taiwan.

Dubious sellers supply large quantities in short timeframe. B2B trade boards provide a global e-commerce platform for sellers and buyers to engage in the distribution of bulk products. OpSec found 275,000 health and beauty listings across B2B trade boards, with an average quantity of 250,000 units available per month for each listing. On B2C platforms, more than 46,500 listings for health and beauty products were found with more than 4.85 million units available. Mascara, nail polish, and shampoo each had more than 1 million pieces available for purchase. A Chinese manufacturer on a leading trade board offered a quantity of 10 million units per month of a popular brand name shampoo. An OEM manufacturer based in China offered a monthly supply of 900,000 bottles of a popular brand name perfume.

Dubious sellers also price products significantly below standard retail price. As OpSec points out, consumers have become more aggressive when price comparison shopping online, creating a large demand for discounted health and beauty products on B2C trading platforms. The ensuing trend creates the perfect catalyst for counterfeiters by triggering the development of cheap products, but also an increased variety of counterfeit products. On B2C auction sites, health and beauty products are sold at a range of 30-40 percent below retail prices.

Reports of urine and other toxic materials have been found in imitation perfumes.

Online trading platforms appear to be particularly conducive to commerce involving health and beauty products that may be counterfeit, substandard, expired, or contain dangerous chemicals.

"In the past, counterfeit health and beauty products were typically focused on high end products, but they have evolved to include everyday personal care items. The anonymity of the Internet fuels an online marketplace where counterfeiters can thrive," said Tom Taylor, president, OpSec Security.

TAGS: Finance
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