On Jan. 30, the U.S. Government Accountability Office issued a report on the threat of counterfeit products to consumers. Among other things, the report highlighted the prevalence of counterfeit cosmetics on popular e-commerce websites such as Amazon.com Inc. and eBay Inc., noting that 13 out of 13 samples purchased from third-party sellers with exceptional approval ratings were fake.
In the age of e-commerce, counterfeit cosmetics present a growing challenge — not only do they pose significant health risks to consumers, but they raise serious legal concerns for brand manufacturers, distributors and retailers.
A Growing Problem
It is no secret that personal care is big business. According to a report commissioned by the Personal Care Products Council and prepared by PricewaterhouseCoopers, the U.S. personal care industry — which encompasses color cosmetics, perfumes, moisturizers, shampoos, hair color and deodorants — was alone responsible for $236.9 billion in gross domestic product in 2013.
As of January 2018, individual spending on personal care products was forecast to grow at an annual compounded rate of four percent between 2018 and 2022. Yet, as cosmetics sales have steadily increased, so too have sales of counterfeit cosmetics.