News

09 September 2020

The rise of Social Media Marketplaces: new opportunities, same old dangers

As online shopping on social networks increases, which consequences do consumers and brands face? The data collected on the Certilogo owned platform highlight trends and risks that can be exploited to fully capture the emerging opportunities.

With an increase of 320% between 2017 and the end of 2020, authentications of products purchased on social networks are one of the leading macro trends of the last 5 years. Such growth has been influenced by the pandemic crisis and the substantial online activity in the first half of this year: despite the overall drop of sales in the fashion market, authentications of products bought on social networks are projected to grow by 39% in 2020.

Marketplaces are here to stay

Consumers rely more and more on Social Media Marketplaces to shop online, as they can simply search for and buy products through their profile on Facebook, Instagram, VK, WeChat or Craiglist, just to mention a few. The ongoing rise of such platforms entail both opportunities and risks for users and brands: thanks to its authentication data, Certilogo has identified the evolution and dangers of Marketplaces as well as the behaviour of consumers.


Although marketplace-shopping is a contemporary trend, what consumers buy on these platforms is not necessarily the latest High Street products. Authentication data show that users rarely purchase the latest fashion products as they mainly shop for older collections. Such trend has been strengthened by the pandemic: in the first 7 months of 2020, authentications of older collections grew by 12% year-on-year compared to 2019.


Consumers are more vulnerable

What better way for counterfeiters to catch buyers willing to interact outside authorised channels? When users reply to a Marketplace ad, they don’t start a conversation with a brand or a store, but with individual vendors who often sell fake merchandise, as Certilogo’s authentication data prove: near 4 out of 10 social network purchases verified on the Certilogo platform are fake, almost twice the average of e-commerce authentications.


Individual counterfeiters also tend to split their trades across different media. They often use the most popular social networks just to showcase their products and catch buyers; then, they fulfil transactions elsewhere, e.g. on Whatsapp or Telegram(*), making illegal sales even harder to track.

Staggering economic losses for brands

The fragmented nature of such transactions prevents social networks from identifying and removing fake goods ads. Moreover, the C2C side of Marketplace purchases affects the shipping of counterfeit products, which get dispatched in single small parcels, complicating customs seizure activities(**). Countless fraudulent parcels mean endless paperwork addressing brands, as they need to support and answer customs on any seizure. The more legal actions, the more costs and resources used by brands to respond, on top of the economic losses caused by both the pandemic and the counterfeit market itself.

What if fake goods could be revealed in just a few seconds?

That is what Certilogo authentication is about, being the faster way to identify a counterfeit product at any stage of selling, from online ad to customs checks and final delivery. If brands adopt the Certilogo smart-tag, consumers will ask Marketplace vendors to show them theCertilogo Seal of Authentication of the product to verify its authenticity ahead of the purchase. Likewise, buyers will be able to authenticate their brand-new product once it’s delivered to their address, to be sure they did not receive a fake. Engaging consumers helps in fact streamline customs checks, resulting in the reduction of legal fees paid by brands for any counterfeit seizure. Moreover, if customs officials can perform authentications on their own to check if products are genuine, brands will be able to reduce the support they have to provide when it comes to seizure paperwork, which will lead to significant time and money saving on both sides.

Sources:
(*) Virginia Della Sala, Contraffazione 2.0: Vendere Falsi nell’Era Social per Due Milioni di Euro
(**) OECD/EUIPO, Misuse of Small Parcels for Trade in Counterfeit Goods: Facts and Trends (2018)

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