It is safe to assume nearly every internet user has at one point came across a fake good, or at least an advertisement for a fake good. Nearly everyone can spot them, except for the occasional grandparent redeeming a free cruise or a teenager finding an amazing deal on a pair of twenty-dollar sneakers. It is quite obvious that yes, these ads are very harmful to consumers and their experiences roaming the internet. What is overlooked, however, is how damaging these ads can be to legitimate businesses and their marketing.
A study done by Incopro, a brand protection company, revealed that fake goods surface in more than sixty percent of Google searches. The study, which resulted in Incopro requesting Google to filter the advertisements more effectively, stated that the fake ads sell everything from sketchy pharmaceuticals to faulty work gear to counterfeit goods. Even fraudulent car parts are being sold on Google. Not only do these findings make consumers skeptical to shop for goods online, hurting search engines such as Google, but they also take away the credibility of online marketing and sales which affects the industry of online sales and business as a whole.
Counterfeit goods damage online sales and marketing on all levels. At the top, they decrease the legitimacy of the online marketplaces and search engines that display the fake goods. They then devalue the legitimate company’s product and their ability to reach consumers with real advertisements. And at the bottom, the consumers are sold fake goods, and lose trust in the companies and marketplaces where the goods are being sold. The negative ripple effect of counterfeit goods displays many flaws in the online shopping and marketing experience for consumers and companies alike. Brand perception is one of the largest impacts that counterfeit goods have on companies. When consumers are misguided and taken advantage of while trying to purchase goods, it will turn them away from the initial company they were trying to purchase from. It also decreases the consumer’s accessibility to real products which could also turn them away from purchasing the companies products.
The close business relationship between Nike and Amazon is a great example of how fake goods affect the online marketplace, as highlighted in an LA Times article. Amazon, being the massive vendor and online marketplace it is, has shown many benefits and disadvantages to major companies such as Nike. In an effort to reduce the advertisement and sales of counterfeit Nike products, Nike struck up a partnership with Amazon, allowing them to sell directly on their giant marketplace. Superficially, the deal seemed to be a win for both sides, however, time went on to show that a halt to the marketing and sales of counterfeits was simply too difficult because fake goods would return to the site under different names and more discreet sellers. As a result, Nike has recently terminated the direct sales of its products through Amazon. This situation exemplifies how fake goods affect the marketplace, individual companies, and consumers all at once. For example, frequent Nike shoppers who pay for Amazon Prime may no longer have access to credible Nike sales on Amazon, and in turn will either buy from a different company or stop using Amazon Prime and buy their goods elsewhere. In another case, Alibaba paid a $250 million settlement for its relationship to the sales of fake goods, going to show that counterfeit goods will not only decrease and company’s legitimacy, but they also can cause damaging economic and legal problems for companies.
Research done by Frontier Economics displayed through the International Chamber of Commerce in 2016 found that an estimated 2.5 percent, or $461 billion of international commerce falls into the category of piracy and counterfeiting. They predicted that in 2022, the total international value of pirated and counterfeited goods will reach 1.9 to 2.81 trillion dollars. Whether the consumers are aware or not of the counterfeit goods they are purchasing, this massive sum of money is money that would otherwise be taxed, paid towards legit business, and continue in the cycle of money throughout the economy. With counterfeit goods, products and businesses are less regulated, more discreet, and harder to hold accountable for quality and contribution to the economy. This data goes to show that the proliferation of counterfeit goods is expected to continue and affect more people along the way.
The industry of counterfeit goods is massive, growing day by day, side by side with the internet. Solutions must be created and implemented by the tech giants like Google and Amazon to help restore consumers’ trust in online shopping and restore the legitimacy of companies and their brand.