Recently, a video comparing the authentic serum of domestic K-beauty brand A Company with a counterfeit product purchased on Amazon was uploaded to the global short-form video platform 'TikTok.' It appeared challenging to distinctly differentiate between the authentic and counterfeit products based on appearance. The colors were similar, and the only difference in pump length was 4mm, being either longer or shorter. Comments such as 'Mine is fake' and 'Please upload comparison videos for B Company products' were posted in succession.
In one community, a user posted a photo comparing the sunscreen of K-beauty brand C Company with its counterfeit version. This user claimed that the counterfeit product did not possess UV (ultraviolet) blocking capabilities, using a UV camera for the comparison. Using a UV camera, areas where UV light is blocked appear black, while areas exposed to UV light appear bright.
Last year, the export scale of cosmetics in South Korea reached a record high of $10.2 billion (approximately 14.8 trillion won), while the number of counterfeit products also visibly increased, causing domestic K-beauty brands to struggle. In fact, searching terms such as #FakeSkincare, #KoreanSkincare, #Kbeauty, and #KSkincare on social media platforms like TikTok and Instagram easily reveals related information, including instances of damage.
The increase in counterfeit products not only directly impacts brand revenues but could also negatively affect the overall trust in K-beauty.
A survey conducted on 500 American consumers who have recently purchased counterfeit beauty products by MarqVision, a generative AI-based brand protection solution startup, revealed that 70.8% of counterfeit product buyers believed that the product they bought was 'authentic.' This is because the marketing strategies used, such as slightly altering brand names or using similar trademarks in Hangul, make it difficult for foreigners to intuitively recognize the products. The lack of significant visual and price differences from authentic products also played a role.
When asked about which beauty brand's counterfeit product was purchased, it was noted that not only global brands like L'Oreal, Maybelline, Clinique, and MAC were mentioned, but also domestic indie brands such as Laneige and Sulwhasoo, confirming that K-beauty is becoming a new target for malicious sellers.
It was revealed that 43% of counterfeit products were purchased through social media shopping platforms, 23.4% via social media messages, and 19% through social media video platforms, indicating that social media is emerging as a channel for selling fake cosmetics. The survey found that one in two consumers trusts reviews when purchasing products, and malicious sellers are using generative AI to deceive them with fake reviews.
Given the difficulty of restoring once damaged trust and reputation, K-brands are actively monitoring the online market and are diving into the eradication of counterfeit product sales. Anua, Chosun Beauty, and Biodance, which are becoming primary targets of malicious sellers, are utilizing MarqVision's solutions.
Charlie Abraham, a global brand protection expert, noted, 'Recently, the distribution of counterfeit beauty products has intricately expanded beyond online marketplaces to social media platforms like Instagram, Facebook, and TikTok, making it challenging for corporations to respond swiftly.' He added, 'Consumers may unconsciously develop negative perceptions of the brand even when purchasing counterfeit beauty products, underscoring the need for proactive measures that protect both brands and consumers.'