Findings of the report will be released Sept. 20 at an event hosted at the National Intellectual Property Rights Coordination (IPR) Center in Arlington, VA.
Michigan State University faculty will be attending The Counterfeit Conundrum: Analyzing Global Consumer Realities in Online Marketplaces to unveil their research and discuss how to effectively educate consumers about the risks of counterfeiting. The three Spartan faculty are affiliated with the Center for Anti-Counterfeiting and Product Protection (A-CAPP) at MSU.
“The strength of our study is that we are looking at a very practical problem, but from a deeply theoretical and empirically driven approach,” said principal investigator Saleem Alhabash, professor of advertising and public relations at ComArtSci.
Nearly three-quarters of global consumers bought counterfeit goods in the past year
Alhabash and co-investigators — Anastasia Kononova, associate professor of advertising; Patricia Huddleston, professor of retailing; and graduate students Moldir Moldagaliyeva and Heijin Lee — surveyed over 13,000 participants from 17 countries. Of those sampled, in the past 12 months, 74% said they had purchased counterfeit products online, and 52% did so knowingly.
Social media accounted for 39% of such purchases; another 39% went to e-commerce. Of those who purchased counterfeits on social media, 68% did so on Facebook, 43% on Instagram, and 38% on WhatsApp — all of which are Meta-owned social media platforms.
Supply chains have been fragmented in the rise of social commerce and e-commerce, allowing sellers of counterfeit goods to develop creative strategies and their own illicit supply chains to circumvent detection. The growth of counterfeit sales on e-commerce and on social media continues to increase exponentially, particularly by third-party sellers. The full report examines the prevalence and attitudes of counterfeiting from a global and country-specific perspective.
Federal legislation is critical first step in protecting consumers
The timing of the study is especially relevant, considering that a piece of federal legislation — the INFORM Consumers Act — went into effect at the end of June. “It’s legislation that is a very critical first step in protecting consumers,” said Carrie Feeheley, assistant director of education and outreach at A-CAPP.
Of the study participants, 30% indicated they lost money because of buying counterfeit products, 8% said their personal data was compromised and 21% felt embarrassed about their experience.
Meanwhile, 10% experienced a negative health effect or incurred a personal injury. Citing data from the World Health Organization, the researchers point out that any prescription medication bought via online pharmacy has about a 50% chance of being substandard, falsified or counterfeit.
“The focus for years has been with the intellectual property rights holders,” explained Kari Kammel, director of the A-CAPP Center. “Consumers have always been secondary, but many brands try to protect their consumers. If a brand has consumers that are getting injured by fakes of their product, they’ve been very concerned … but it is challenging for them to protect consumers on online platforms with third party sellers because the platforms control access to their retail space. In the policy space, particularly regarding online platforms protecting and educating consumers about counterfeiting, this has not been talked about very much except for INFORM Consumers and SHOP Safe bill.”
This legislation, which outlines certain online retailer responsibilities, is a good start. The A-CAPP Center advocates for consumer education about counterfeiting — and what to do when consumers suspect a purchased product is not legitimate, particularly for online platforms.
Consumer motivation and education
“We saw a huge opportunity in working toward building educational practices so that consumers can actually start learning, or at least start being in an alert state when they shop online,” said Kononova. The survey findings pointed to lack of clear mechanisms that consumers can employ when they buy products online and later find they are counterfeit.
The study looked at factors predicting counterfeit purchase online and found that even though participants rated price as their top motivation for buying counterfeits, impulse buying driven by hedonic values was the strongest predictor of counterfeit purchase. Kononova hopes the study will also help brands develop better advertising and communication campaigns.
Huddleston agrees. “We’re hoping that this study will serve as a baseline to do further work, because even with this study, we don’t yet understand what messages will be effective in deterring people from buying counterfeits. Our work isn’t done, but it is a very comprehensive study and it does give us a lot of insights into why people do buy.”
Social influences, attitudes and potential risks impact decisions to buy counterfeit goods online
In their study, the team examined how certain factors related to social influences and potential risks affect consumers’ decisions to buy counterfeit goods. Notably, they found that if individuals had a positive view of buying counterfeit items, it strongly influenced their choices and plans to make such purchases. This suggests that changing consumers’ attitudes about counterfeit goods could be a way to help them make different choices.
The study also uncovered a puzzling situation regarding how people perceive the risks associated with counterfeit products. While awareness of counterfeit dangers during online shopping acted as a deterrent, heightened feelings of vulnerability to these risks actually increased both the intent and occurrence of counterfeit purchases.
The researchers argue that it’s important to use tailored strategies to reach different kinds of consumers — especially those who are most at risk of buying counterfeit goods online — to help address the complex relationship between attitudes, risk perceptions, and behavior when it comes to counterfeit purchases.
About the Global Anti-Counterfeiting Consumer Survey
The 2023 A-CAPP Global Anti-Counterfeiting Consumer Survey reports global and country-level findings from Argentina, Australia, Brazil, Canada, China, Egypt, India, Italy, Kenya, Mexico, Nigeria, Peru, Spain, South Korea, the United Arab Emirates, the United Kingdom, and the United States of America. The survey, developed in English, was translated into Arabic, Chinese, Italian, Korean, Portuguese, and Spanish. The report can be purchased and accessed on the A-CAPP website.
About the A-CAPP Center
The Center for Anti-Counterfeiting and Product Protection at Michigan State University, founded in 2009, identifies and examines the complex issue of trademark counterfeiting from a practical, actionable, academic nexus/viewpoint, working collaboratively with brand protection practitioners and communities worldwide and is based in the College of Social Science.
—Jessica Mussell and Matt Dwyer