Counterfeit Goods Are a $460 Billion Industry, and Most Are Bought and Sold Online

Footwear, electronics and eyeglasses top the knocked-off product list

Consumers spend $460 billion on counterfeit goods every year.
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According to the International Trademark Association, $460 billion worth of counterfeit goods were bought and sold last year. Not surprisingly, much of it happened online. “The internet makes it easy to hide,” said INTA anti-counterfeiting coordinator Tiffany Pho.

But where online do most fake goods change hands? A new study from Red Points, a brand-protection firm based in Barcelona, Spain, shines a light into this shadowy realm.

Using data generated by its custom-built web crawlers that search for fake merchandise on behalf of its 200 clients, Red Points compiled a Top 10 list of sites where counterfeit goods are most frequently bought and sold. Leading the list is Aliexpress, Chinese etailer Alibaba’s marketplace aimed at international shoppers.

In fact, six of the 10 sites on the list are headquartered in the Far East—China in particular, which has a long-standing reputation for counterfeit production and what you might call a relaxed attitude toward intellectual property. Even so, according to Red Points CEO Laura Urquizu, things are better than they used to be. “In the old days in the Far East, there were no rules, and anyone could do anything,” she said. Today, Asia-based etailers are “cooperating more and more” in the fight against fakes, though the problem’s far from solved.

One surprising name on the list is Facebook—which, unlike the other sites listed, isn’t an ecommerce platform. But since shady retailers can post products there and complete a transaction by soliciting an email or directing shoppers to a landing page, Facebook qualifies as a retail site—at least according to Red Points.

A Facebook spokesperson disagreed with this logic, but explained that seeking out users posting “unsatisfactory” products among a user base of 60 million is “a complex problem”—and one that Facebook is addressing.

Meanwhile, Red Points’ study also identified the most commonly counterfeited goods. As it turns out, the most knocked-off item isn’t a designer handbag, but sneakers. “Handbags are for women, but footwear is for everybody,” Urquizu said. “It’s an expensive item that draws all of the population.”

This story first appeared in the February 13, 2017, issue of Adweek magazine. Click here to subscribe.