Counterfeiters turning attention to smaller businesses, says study

A new study has found that counterfeiters are increasingly targeting small and medium sized businesses (SMBs), which tend to be more vulnerable than large companies.

The analysis by Spanish cybersecurity company Smart Protection – based on 12,000 companies selling goods online in Europe and North America – found that four out of every five SMBs suffer from counterfeits and brand abuse on the Internet, but are often unaware of the threats.

While larger companies might be considered more of a target because of the strength of their brands, they generally have brand and product protection strategies in place to deter counterfeiters, such as monitoring online platforms for intellectual property infringements.

Nevertheless they are also under threat – the poll found 81 per cent of them also had problems with counterfeits or brand abuse.

"Counterfeits on the internet are becoming more sophisticated every day," according to Smart Protection chief executive Javier Perea.

"Cybercriminals can quickly select and copy emerging brands that are experiencing notable growth in their digital sales," he says. "This situation can pose a serious threat to their brand reputation and revenue, and it is especially sensitives for SMBs that are expanding into new markets."

Among the SMBs, 15 per cent said they suffer from exceptionally high levels of counterfeiting, with around a third (34 per cent) describing the activity as at a high level. A little under one third (31 per cent) said they are affected but at a medium or low level.

For larger companies, the corresponding figures were 22 per cent very high, 36 per cent high and 23 per cent facing a medium/low level of infringement.

The analysis found that companies in the fashion sector were most affected by counterfeiting, with 93 per cent of SMBs reporting it as a problem.

Other sectors scoring highly included electronics (82 per cent), sports equipment (79 per cent), homeware (73 per cent), toys (69 per cent) and cosmetics/personal care (65 per cent).

SMBs from the US attract the most attention from counterfeiters, according to the study, while in Europe the top countries are the UK, Italy, and France, closely followed by Spain and Germany.

Earlier research by Smart Protection found that while 90 per cent of consumers are aware that counterfeits are advertised and sold online, one in four have unintentionally purchased a fake.