Consumer Goods Industry

Counterfeiters and grey marketers exploit the Internet’s wide reach, low cost, and anonymity

Looking for a well-known branded consumer item—shoes or jewelry, for example? Better be careful: in 2007, the World Intellectual Property Review reported 22 percent of consumer goods sold online were counterfeit.

The sale of grey market and counterfeit goods—from luxury and sporting goods to everyday items like shampoo and cigarettes—thrives on the Internet. This robust distribution channel is fueled by counterfeiters, and grey marketers moving stolen, damaged and recalled goods. In fact, criminals have created a virtual supply chain with products being sold in bulk to wholesalers on popular B2B exchanges and then resold to consumers via illicit auction and eCommerce sites.

With online sales rising 21% annually, according to the U.S. Department of Commerce, this is big, global business. Scammers employ savvy marketing strategies to confuse consumers and divert web traffic, including illicit advertising on search, eCommerce and social media venues, and—especially in the case of luxury goods—spam. Legitimate brandholders pay a heavy price: lost revenue, flagging demand, angry channel partners, skyrocketing warranty and service costs, and increased product liability as consumers buy sub-standard goods. Brands lose their cachet as brand equity erodes and customer trust diminishes.

To take back their brands, channels, and revenues, consumer goods manufacturers will need to create, for the online world, what they already spend millions doing in the offline world: a comprehensive brand protection strategy. MarkMonitor® can help.

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