November 23, 2020

Counterfeits Soar as Ath-leisure Dominates Online Quarantine Purchases

As consumers settled in at home due to quarantine, online sales of activewear and sporting equipment have notably come out on top. According to Allied Market Research, the global activewear market is now expected to be worth nearly $547 billion by 2024.

Further, a new survey conducted by Red Points, the brand protection firm, found on average consumers have spent $265 more on sporting gear and equipment during quarantine than they otherwise would have. The survey also revealed half of consumers have purchased counterfeit items within the category, both purposefully and accidentally.

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Of those who purchased counterfeit items within the sporting goods category the company fund nearly 30 percent had purchased cardio equipment, 22 percent purchased yoga and flexing equipment and 19 percent purchased apparel and accessories.

“I was shocked by 50 percent of people buying counterfeits and secondarily shocked that almost 30 percent bought it knowingly,” said Daniel Shapiro, vice president of strategic partnerships and brand relationships at Red Points. “They looked at it, they knew enough about the brand to know whether it was real or not. and they bought it anyway.”

According to Red Points, there has also been a surge of new counterfeit sporting items entering the marketplace since quarantine began. Notably, the company saw a 110 percent increase of counterfeit detection from April to June, when compared to pre-COVID-19 months. The counterfeits have been found across online marketplaces and social media.

“In this case, counterfeit is taking 28 percent of their business from a brand,” Shapiro said. “This is a call to action to brands that says if you’re not protecting your brand aggressively, either through your own team or through hiring a partner like us, but not doing something in this particular time could cause you to go out of business. I’m so nervous that some of these small brands won’t be here tomorrow if they’re going to give up 20 percent of your business to a counterfeiter.”

But losing sales is not the only way counterfeits hurt a brand. Red Point’s research revealed that 22 percent of people who purchase a counterfeit hold that brand responsible for not taking action against the seller when they are disappointed by the product. According to Red Point’s data, these consumers are also susceptible to writing negative reviews on a brand’s website when they are unaware the purchased item was unauthentic.

“If you are a brand new consumer and you bought a fake Peloton bike, and you say, ‘This is the worst exercise bike in the world’ and ‘I wouldn’t buy one,’ now [a brand is] getting beat up for something that’s not theirs,” Shapiro said. “That’s very concerning if you’re a brand that’s trying to grow your business, or even survive during this.”

For those consumers who purchased counterfeits unknowingly, the company’s research revealed a number of reasons for the increase. The first reason is notably consumers who are seeking the best price. Another reason is the increase in consumers shopping online for the first time due to quarantine.

“When things got shut down and locked down and there was no way to physically go to a retailer to buy, you had a lot of consumers that are less sophisticated than Millennials, maybe people [who are maybe] 50 to 70 years old,” Shapiro said. “If [consumers] are not used to buying online, they’re a bit more susceptible to fall for things on social media.”

“I always put people who buy counterfeit into two buckets,” Shapiro said. “One is sort of the ‘silent suffer.’ And then there’s the sort of ‘counterfeit seekers.’ That’s the person who’s looking for a counterfeit because the price is important to them and they could care less that it’s counterfeit. Both consumers at the end of the day, when things go bad the brand is sort of left holding the bag and it’s disappointing.”

Moreover, sporting goods and ath-leisure are not the only categories being hit hard by counterfeiting. Red Points has seen a 58 percent increase in counterfeit detection for its U.S. brand partners and a 40 percent increase with its global brand partners across all categories.

“With COVID-19 still keeping some brick and mortars closed and keeping people hesitant from shopping, e-commerce is still going to be the channel that you’re going to have to figure out how to make a living in, and you’re going to have to clear out those counterfeits,” Shapiro said. “It’s a collaboration. Setting sites and resources and recognizing that this is a battle and you got to fight it to win, right, because the long term health of your business sort of counts on you making available time and resources to protect your brand.”

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