The “dangerous” market of fake cosmetics and how to end it

11 Feb, 2021

In 2018, the value of the global cosmetics market was 507.8 billion U.S. dollars. The same market is projected to reach the value of almost 760 billion U.S. dollars by 2025. (1) The growth of the cosmetics field has gone hand-in-hand with an increase in counterfeiting, which some associations have quantified as a rise of at least 264% from one year to the next. (2)

According to the EUIPO, 35% of the fake cosmetics purchased in Europe are sold on the primary market. (3) This is a severe problem because if it is true that in secondary markets most consumers deliberately prefer to buy a fake product over an original one, on the primary market the buyers doesn’t even expect to get scammed. Plus, in the second case, every sale clearly represents a direct loss for industries.

British authorities have estimated that consumers in the United Kingdom alone spend at least 90 million pounds — more than $120 million — annually on fake cosmetics. (4) The flourishing of this market represents a profit loss for the counterfeited brands, and therefore reduced investments on their side. This means loss of jobs, incentives for illegal employment, and an increase in pollution, not to mention the serious health risks to which consumer are exposed to. Laboratory analysis on such fake products have revealed the presence of toxic levels of substances such as arsenic, mercury and lead. These could be the cause of chemical burns, skin rashes, and in severe cases of toxic effects on the nervous, digestive, and immune systems. (5) These risks are present whenever we use personal care products, therefore on a daily basis.

To protect customers’ health and brands’ reputation, Authena created a revolutionary platform able to grant authenticity, end-to-end traceability, and integrity of every single cream, lipstick, or mascara. This technology provides each item with a unique blockchain-encrypted passport that can be verified immediately via NFC technology. In 2005 EU Directive 2003/15, introduced an obligation to state the PAO (Period after Opening) on the label of all cosmetics. This indicates the period for which a product can be preserved after opening. Thanks to its opening detection feature, Authena’s anticounterfeiting solution alert users about its expiry, featuring instructions for use, intended applications and customized promotional material. All instantly accessible to the consumers with a tap of a smartphone. At the same time brands can step up from competitors, increase brand loyalty and dispose of unprecedented market analytics. In fact, they are given access to a powerful dashboard to monitor in real time the entire product value chain, from their warehouse to their distributors and final markets.

Alessandro Tacconelli

The “dangerous” market of fake cosmetics and how to end it