Market research

MOTHER’S DAY AND FAKE PRODUCTS

Where and how counterfeiters look to capitalize on the demand for gifts

Section 1Mother’s Day and counterfeitsA collection of research outlining the importance of Mother’s Day as a consumer event and the prominence of fake products over the holiday.

Section 2Mother’s Day and beauty productsRed Points’ client data shows how beauty brands are at risk on Mother’s Day, and why social media is such an important channel.

Section 3Fake beauty products on social mediaConsumer research conducted by Red Points into beauty consumers’ behavior and exposure to fakes on social media.

Market research

Key Findings

of people who had bought a fake gift by mistake would be hesitant about buying that brand again84%

of all intellectual property infringements for beauty brands were found on Facebook or Instagram30%

of people surveyed said that seeing content selling fakes makes them less likely to engage with posts from authentic brands

of respondents regularly see social media content selling products they believe are fake73%

of respondents had previously bought a Mother’s Day gift that turned out to be a counterfeit16%

increase in detections of fake beauty items on Instagram in the weeks leading up to Mother’s Day40%

37%

1

Market research

MOTHER’S DAY AND COUNTERFEITS

Mother’s day is a big commercial event with Americans spending an average of $180 each, totaling a $23.1 billion spend on the holiday. The beauty industry is one of those sectors experiencing higher demand and increased sales during this period. As social media has become an incredibly important channel for the industry in recent years, beauty brands are investing heavily in influencers and capitalizing on new tech features like the in-story purchase option in Instagram to boost sales.

Market research

Mother’s day, like most consumer moments, is gradually migrating from the high street to online shopping. In a survey conducted by Red Points, over 63% of respondents stated they plan to shop online for gifts for Mother’s Day.

Question 1Please indicate if you are planning to buy a gift online for Mother’s Day

Yes

No

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

100%

63%

Buying behavior

Question 2

Buying behavior

What type of item are you planning to purchase?

In the same survey participants were asked about what items they were planning on purchasing, and the top three items were jewelry, clothes, and beauty products.

27.6%

28.9%

36.6%

27.5%

26.2%

18.8%

18%

16.9%

12.2%Wine/Alcohol

Clothes

Jewlery/ Watch

Beauty &Cosmetics

Kitchenware

Purse/Bag

Electronics

Shoes

Other

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Question 3

Buying behavior

Have any of your Mother’s day gifts turned out to be a fake?

The following graph shows that 16.7% of consumers have bought a fake item for Mother’s Day. While only a small number were aware the product was fake, this is still a very large amount given the average spend per consumer; this could potentially account for millions of dollars in lost revenue for brands if it’s representative of the real number of counterfeits bought.

Yes, I purchased an

10.6%

6.1%Yes, I knewit was fake

83.2%No

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Question 4Has unintentionally purchasing a counterfeit made you heasitant about purchasing products from that brand in the future?

Buying behavior

Finally, we can see that counterfeit products bought on Mother’s Day can have a deep and lasting effect on brand value, as more than 84% of respondents who had bought a fake product stated they would now be hesitant about buying that brand.

84.6%

16.3%

Yes

No

2

Market research

MOTHERS’ DAY AND BEAUTY PRODUCTS

Buying behavior

Why beauty products?

According to the previously mentioned Mother’s Day research, beauty product scored among the top three most popular gifts to buy.

Red Points’ analysts regularly see a spike in counterfeit beauty products in May, coinciding with shoppers’ pre-Mother’s day shopping. This upward trend begins in the weeks leading up to Mother’s Day and then tapers off. Our data shows that this spike in listings offering suspected fake beauty products is even more pronounced on social media.

Beauty clients’ data

Buying behavior

This graph shows the data collected for over 40 beauty clients over 2018 on Facebook and instagram. Here you can see a clear increase in detections in May.

0%

40%

90%

100%

Det

ectio

ns

30%

80%

20%

70%

10%

60%

50%

InstagramFacebook

May

Month

AprMar Jun Jul

Facebook & Instagram detections over the time

Buying behavior

We chose to focus our research on social media and beauty products for a number of reasons:

• Social media is where we see the biggest increase in detections in the weeks running up to Mother’s Day.

• It’s an extremely important marketing channel for beauty brands.

• Social media accounts for a large number of intellectual property infringements, especailly for our beauty clients.

Why social media?

Beauty clients’ dataTop 7 sites for confirmed infringements

Buying behavior

The graph below shows the distribution of confirmed intellectual property infringements for 40 beauty clients. While eBay appears to be the largest source of infringements at 29%, Facebook and Instagram combined account for 30% of all confirmed infringements. Facebook and Instagram have large audiences and sophisticated advertising tools. For these reasons, counterfeiters have used these platforms to capture traffic and send interested parties to other

ecommerce sites to make purchases. However, both Facebook and Instagram now provide transactional functionality, meaning companies are now able to sell their wares directly through these platforms. Previously, brand protection has been focused on removing the actual point of sale, i.e. an Amazon listing, removing the social media was secondary. The development of Facebook and Instagram as marketplaces means that brands must also prioritize potential infringements on these sites.

9.2%Amazon

17.1%Wish

29.8%eBay

7.2%Dhgate

6.5%Alibaba

18.9%Facebook

11.3%Instagram

3FAKE BEAUTY PRODUCTS ON SOCIAL MEDIA

We used an online survey platform to conduct this research. None of the participants have taken part in any previous Red Points’ surveys, so not to corrupt potential results.

In many of the questions asked, our participants were able to select more than one answer. This allows us to have a more complete picture of their opinion and actions.

AGE:

18-60GENDER:

Female (62%) Male (38%) LOCATION:

U.S.ALANGUAGE:

EnglishNº OF PARTICIPANTS:

534

About this survey Qualification question

To ensure our results are as accurate as possible, we asked our participants a qualifying question. Only respondents who have purchased a beauty product online in the last year were eligible to complete the survey. This ensured that all our answers were given by actual beauty consumers who shop online

Market research

BEHAVIOR ON SOCIAL MEDIA

Market research

Question 1What influences which cosmetics or beauty products you buy?

Buying behavior

We can see that friends and family were by far the most influential group for beauty and cosmetics purchases. However, social media activities accounted for the next two most popular responses. When we look at the data filtered by age we can see that social media and social media influencers in particular are very powerful for younger audiences.

In fact, 37.5 % of 18-29 year olds’ product selection is affected by social media influencers compared to the average rate of 24.6%. Also, 42.9% are influenced by social media posts by brands, this is higher than the average rate of 34.3%.

Soci

al m

edia

ad

s

Soci

al m

edia

post

s by

bra

nds

Age:

18-2

9

31.3

%

31.3

%

34.3

%

42.9

%

TV a

ds29

.6%

24.1%24

.7%

37.5

%

Soci

al m

edia

influ

ence

rs

66.3

%

65.6

%

Frie

nds

and

fam

ilyC

eleb

rity

endo

rsem

ents

12.1% 16.5

%

5.3% 7.6%

11.2

%

8.9%

Radi

o ad

s

Oth

er

0% 0%

40% 40%

70% 70%

20% 20%

10% 10%

50% 50%

80% 80%

30% 30%

60% 60%

90% 90%

100% 100%

Buying behavior

Question 2How do you usually search for beauty products online?

Although social media is influential in what beauty consumers buy, it is not the main method they use to search for beauty products online. Amazon was by far the most popular method of searching for beauty products, followed by beauty-specific sites like Sephora. However, Instagram and Facebook combined account for 40.3 %, which is almost as popular as beauty-specific sites.

For 18-29 year olds Facebook and Instagram were the second most popular choice, with almost 50% of them selecting social media.

23.4%

16.9%

68.5%

11.9%

6.6%

10.4%

41.6%

24.9%

28.1%

7.9%

Departmentstore sites

Other

Facebook

Amazon

Instagram

eBay

Aliexpressor Alibaba

Wish.com

Beauty-specificsites

Brand-specificsites

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Question 3Have you ever purchased a beauty product due to an advert, comment or post you saw on social media?

Buying behavior

Here we can see that nearly two-thirds of beauty consumers have purchased an item due to a social media comment, post or advert. This confirms that social media activity has a direct impact on beauty consumers’ purchase decisions.

This number is even higher among 18-29 year olds, with 70.5% confirming that social media activity has directly caused them to purchase a product.

62.9%

37.1%

Yes

No

Question 4

Buying behavior

Would you click on a social media post that offered a discounted beauty product from a seller you were not familiar with?

Here we can see that most consumers would engage with posts from unknown sellers offering discounts. This number is, once again, higher for 18-29 year olds where 70.5% said they would click on a discount offer from a previously unknown seller.

This could be viewed as high-risk shopping behavior and suggest that consumer-education is may be required.

60.3%

39.7%

Yes

No

Question 5From the following options, which would you be most likely to click on, if it was offering a beauty product at a discount?

Buying behavior

Question five was only asked to those respondents who confirmed they would click on a discount offer in the previous question. We can see a relatively even spread throughout the options; however, most respondents would click a post from a brand. Comments from other users also proved very persuasive. Both these findings could have large implications for brand protection actions.

(For participants who answered yes to question 4.)

24.1%

17.2%

18.8%

29.1%

10.9%

A comment from another user

An advert

A post from a seller

A post froma brand

A post fromanother user

0% 40% 70% 100%20%10% 50% 80%30% 60% 90%

FAKE BEAUTY PRODUCTS ON SOCIAL MEDIA

Market research

Question 6

Buying behavior

Have you ever bought a beauty item online that you later suspected might be fake?

We can see that one-third of participants have bought an item they later suspected might be fake. If this is representative of the market as a whole, this would imply that there is a substantial problem with fake beauty products online.When we filter results by age, again we see that 18-29 year olds are affected more than older respondents, with 38.8% stating they have bought a fake beauty item online.

33.7%

66.3%

Yes

No

Question 7Where did you find the suspected fake item?

Buying behavior

Here we can see social media has a huge part to play in the sale of fake beauty products, with 48.6% of all suspected fake items being found via either Facebook or Instagram. While this doesn’t necessarily imply that the transaction took place on these sites, it further reinforces the idea that these sites are used to market counterfeits.

When we filter this data by age of respondents, we can see an interesting break down in source. For respondents above the age of 30, Facebook was the primary source of counterfeits. However, for 18-29 year olds, Instagram was the most common way of finding fakes.

(For participants who answered yes to question 6.)

Facebook

Instagram

25.1%

23.5%

Amazon 19%

14.0%eBay

5%Aliexpress orAlibaba

Wish.com 6.7%

4.5%

2.2%

Website immita-ting the brand

Other

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Question 8

Buying behavior

Do you regularly see Facebook or Instagram ads, comments or posts that advertise products that you suspect are probably fake?

We can see here that most of our beauty consumers have seen some form of post or advert selling fake items. As we would suspect at this point, the number of 18-29 year olds who have seen ads for fakes is larger than the average, with 77.6% answering yes to this question. This question highlights just how common posts, ads, and comments marketing fake beauty products are on these platforms.

73%

27%

Yes

No

Question 9How do you usually see these fake-product offers?

Buying behavior

From those participants who stated they regularly see offers of fake products on social media, we can see that most are shown these via adverts on either Facebook or Instagram. This means that brands not only have to monitor for fake accounts and organic or promoted posts, but they should also monitor adverts on social media platforms.

When we segment the results by age, we can once again see Facebook is a bigger problem for those aged over 30, with 45.8% of those aged 30-44 stating they usually see fake product offers via Facebook posts, compared to only 19.7% of 18-29 year olds.

(For participants who answered yes to question 6.)

Buying behavior

Instagramadvert

Facebookadvert

20.9%

34.6%

Instagrampost 17.1%

13.4%Facebookpost

9.8%Comment on Instagram post

Comment on Facebook post 4.1%

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Question 10Do you think that adverts and posts selling fake products affect how you interact with authentic brands on social media?

This question helps us understand if these posts, comments, and ads have a net negative effect on brands’ online value. 37.9% of respondents are less likely to interact with posts or adverts from genuine brands because of ads or posts selling fakes. A further 39.4% would be more cautious when engaging with brands on social media. If we aggregate the data we can see that 77.3% of consumers are negatively impacted by adverts and posts selling fakes.

When we isolate the responses to this question for 30-45 year olds, we can see the number of people who would be less likely to engage with brands on social media jumps to 45.5%. This increase implies that 30-45 years are slightly more sensitive to the presence of ads and posts selling fake cosmetics and react in greater numbers.

Yes, I’m less likely interact

37.9%

39.4%Yes, I’m more cautious

22.6%No, they don’taffect me

0% 40% 70%20%10% 50% 80%30% 60% 90% 100%

Buying behavior

Product evaluation and counterfeitsMarket research

KEY TAKEAWAYS

Key takeaways

BEAUTY BRANDS WITHA YOUNG AUDIENCEARE AT RISKThe study found that for almost every question, younger age groups were at greater risk of buying counterfeits and were more affected by social media with regards to buying habits. We can see this in question one, where 37.5 % of 18-29 year olds’ stated social media influencers affect what beauty products they buy compared to the average rate of 24.6%. 50% of 18-29 year olds look for beauty products on social media and they are more likely to click on an offer from an unknown seller that older participants. All in all, younger participants are more affected by what they see on social media, they take more risks, and as a result they buy more counterfeits, as shown in question six.

Implications for brandsBeauty brands with a younger audience must take action quickly. It is clear that social media will offer them a lot of marketing opportunities, given how receptive younger audiences are to social media content. However, this audience is also more likely to encounter fakes and content selling fake items. More specifically, brands should look to Instagram first as this is where younger participants typically found fakes.

ADVERTS, COMMENTS AND POSTSThe research found that counterfeiters use all types of social media content to market fake products. Question three established that almost two-thirds of respondents have made a purchase due to the influence of social media content. What’s more, 60% would be likely to click content from a seller they were not familiar with, if it was offering a discounted product. This type of behavior would put consumers at risk. Question five found that a post from a brand was the type of content that users would be most likely to engage with, however, comments from other users were also a popular choice.

Implications for brandsThe findings from questions three to five show that brands should pay close attention to social media output and in particular, those entities posing as the real brand as these are the ones users would be most likely to engage with. It also implies that they should look at comments on their posts, as consumers value the opinion of other users, and unsurprisingly counterfeiters take advantage of this.

Conclusion

Market research

Market research

FAKE PRODUCTS ANDSOCIAL MEDIAOver 30% of beauty consumers have purchased a product online that they later suspected might be fake. While it is fair to note that these are suspected fake products, even with a generous margin of error this number suggests that there is a high number of fake beauty products online. According to the study, 48% of fake beauty items were sourced on Facebook or Instagram, this cements the idea that social media is a hotbed of intellectual property infringements for beauty brands. Question eight demonstrates the sheer volume of content on social media, 73% of respondents stated they regularly see social media content offering products they believe to be fake. Facebook adverts and Instagram adverts were the most common type of fake-selling content people saw.

Implications for brandsGiven that a very high number of beauty consumers who have purchased fakes found on social media and the many consumers are regularly shown content advertising fake items, brands must direct efforts towards enforcing their intellectual property on these platforms. Furthermore, brands should direct particular attention to adverts, which appear to be the most common method of advertising fake items.

The contents of this publication do not necessarily reflect the position or opinion of Red Points. The services of the Red Points Blog are not of a legal or advisory nature and no responsibility is accepted for the results of any actions made on the basis of its services. Before taking specific actions in relation to IP protection or enforcement all customers are advised to seek independent legal advice.

Product evaluation and counterfeits

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