Countering counterfeit cosmetics 


by Marie Pettersson

Counterfeit cosmetics
Read any beauty magazine and even mainstream newspapers, and horror stories abound about the dangers of counterfeit cosmetics. The draw of a bargain often leads consumers to purchase too-good-to-be-true fake makeup that turns out to be toxic. Cosmetics brands, eager to protect consumer safety, also want to safeguard their hard-won brand image by countering counterfeit cosmetics.  

Lost value due to counterfeit cosmetics

Counterfeiting and parallel markets account for 509 billion USD in losses, compared to the comparatively paltry 112 billion USD brands have invested in anti-counterfeiting measures. As of 2022, cosmetics brands lost about 5.4 billion USD in sales to counterfeit products. According to a EUIPO study, sales losses in the cosmetics and personal care sector increased by more than 2.5 billion EUR since 2019, which was the highest increase among a number of sectors studied. 

Economic losses represent one kind of value for cosmetics brands, but a harder-to-measure and much more damaging kind of loss is in brand image. Counterfeit goods, particularly when they do serious harm to consumers, steal reputation and prestige value from brands that have worked to build both consumer trust and public image. The pervasive presence of counterfeit cosmetics gradually chips away at brands and their good names. But worse still is when consumer health is harmed and irreparable damage is done to the real brand.

Protecting the brand; protecting the consumer

Countering counterfeit cosmetics is notoriously difficult and poses real threats to consumers. Tackling the complexity of protecting the brand and the consumer requires collaboration between industry stakeholders, regulatory bodies, and technology-driven solutions.

Counterfeit cosmetics challenges

Counterfeit cosmetics products are often manufactured using substandard or harmful ingredients, putting users at risk of skin irritation, allergic reactions, and even long-term health consequences. Counterfeits are also packaged and labeled to closely resemble legitimate products, making it next to impossible for consumers to distinguish between genuine and fake items.

The global nature of the cosmetics industry adds another layer of complexity to the fight against counterfeits. Counterfeiters take advantage of supply chain vulnerabilities to introduce counterfeit goods into the market. The lack of standardized regulations across countries worsens the problem, as counterfeiters can exploit regions with weaker enforcement mechanisms.

Supply chain visibility: Creating transparency with traceability

Supply chain visibility, as challenging as it can be to achieve, is the key to preventing counterfeits. Visibility equals transparency, making the whole supply chain visible, from raw materials at origin to manufacture to packaging to distribution to retail to post-purchase to reuse or recycle. 

Traceability technology enables this visibility and transparency, based on assigning unique digital IDs to individual products. Unique digital IDs create the foundation of a  digital traceability infrastructure as part of a collection of connected products. Creating connected products enables traceability through the entire supply chain journey, providing a trail of data that brands can use not only to prove the authenticity of the product to consumers but also for regulatory reporting and ESG purposes. 

Putting traceability to the test: Countering counterfeit cosmetics

Are consumers able to verify whether your products are genuine? Can consumers easily authenticate your products as coming from official resellers? Can consumers easily find out that your products have not been tampered with? Is information about ingredient sourcing or cruelty-free credentials easily accessible?

Use traceability technology to let your products tell their own story. Download our latest e-book on beauty and cosmetics to learn more.

Download “The Beauty Behind Traceability” E-Book

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