As counterfeit toy sales increase, Rachel Jones, CEO and founder of online brand protection firm SnapDragon explains how to identify and put a stop to fakes.
As counterfeit toy sales continue to rise, the importance of being able to firstly, identify and secondly, prevent the sale of infringing goods has never been greater.
The Office for the Harmonisation in the Internal Market estimates that our legitimate toy industry in Europe loses approximately €1.4 billion of revenue annually due to the presence of counterfeit games and toys in the EU marketplace, corresponding to 12.3 per cent of the sector’s sales.
In turn, these lost sales translate into direct employment losses of approximately 6,150 jobs.
The sad fact is that nowadays, any SME with the global footprint is at risk. Gone are the days when only the luxury brands or FMCG were the ones being ‘faked’. Lesser-known brands are being targeted because the infringers believe they are less likely to have the resources to take action.
As we all know, telling the counterfeit and the genuine apart can be truly difficult, particularly online where original images may be being illegally used and price differentials are small. Many bogus products have authentic looking packaging.
Worryingly, safety is often compromised. Counterfeiters cut costs by using unregulated materials and toxic chemicals in dyes. High levels of carcinogenic phthalates are often found, and fakes may have poorly made loose pieces and sharp edges.
But it’s not just our customers who are at risk. Manufacturers of genuine toys also suffer the consequences. Counterfeits destroy brand reputations. If a consumer purchases a substandard product they will likely assume the brand is at fault and take their custom elsewhere. Brands can identify the problem and respond appropriately, but the damage may already have been done. The threat of reputational damage must not be underestimated.
There are many proactive steps which can be taken to protect brands online. While it might seem like an overwhelming undertaking, there are ways you can protect your customers and your revenue streams that are straightforward and won’t break the bank.
Ensure your trademarks are registered not just at home, but wherever you are planning to trade. Include secret ingredients in your toys, wherever possible – which only you know are part of the toy’s identity.
Keep an up to date file of product images and marketing material for proof of originality. Register your product and brand with the Enforcement Database at EUIPO – it’s free and alerts customs authorities throughout Europe to any incoming fake goods. And choose and review your distributors and resellers very carefully.