Fakes impact personal care firms 'by 15 to 20 per cent'

Counterfeiting will impact the growth of the organic personal care products market in the US over the next five years, according to new market research.

Overall, the market for products such as organic skin care, hair care, oral care, and cosmetics is predicted to grow around 10 per cent per year between 2016 and 2020, driven by rising disposable income among the working middle-class population in the US, says the Technavio report.

At the moment, soap, shampoos, perfumes, and cosmetics are the product categories most affected by counterfeiting in the personal care products market, according to Technavio analyst Brijesh Kumar Choubey, who estimates the annual revenue loss for manufacturers is in the range of 15 to 20 per cent.

The counterfeiters tend to target big-selling brands, with Perry Ellis, Dolce & Gabbana, Calvin Klein, and Davidoff among the manufacturers affected by the criminal activity. "Counterfeiting of premium brands is expected to strengthen over the coming years," he told SecuringIndustry.com.

Among the reasons for the growth of counterfeit products include the ease with which fake products can be distributed via online channels, providing counterfeiters with a cost-effective way to increase their geographical reach.

Other factors are the ability of counterfeit producers to operate with relatively high anonymity, the low investment and high return nature of counterfeiting, and fewer regulations around the channel than other sectors such as pharmaceuticals and foods/beverages.

As ever, consumers' desire to buy premium personal care products at a cheaper rate is a key driver for the illicit trade.

Moreover, while enforcement operations have chalked up some notable successes, on a global scale, seizing of counterfeits represents a tiny proportion of the revenue generated through the sale of these illicit products.

China is major source of counterfeit personal care products, but other countries in the Asia Pacific region - including South Korea, India, and Indonesia - are also notable countries of origin, according to Technavio.

The report notes that brand owners are deploying measures to fight back against the counterfeiters, including closer collaboration with customs and other enforcement authorities, online retailers and the use of smart coding technologies to ensure effective tracking and identification of products through the supply chain.