Research and analysis

Social media influencers and counterfeit goods Executive summary

Published 22 December 2021

Background

Intellectual property rights underpin the innovation that drives the free-market economy and enhances the welfare of the public. They are crucial in providing rights owners with the protections they need to invest in creative ideas and the development of their brands. The illicit trade in counterfeit goods directly harms the market, hinders development, and undermines public welfare. Globalisation and the digital economy has provided criminal enterprises access to markets across the world. The Organisation for Economic Co-operation and Development (OECD) and European Union Intellectual Property Office (EUIPO) (2019) estimated that the international trade in counterfeit goods in 2016 was worth $509 billion (OECD & EUIPO, 2019).

An important recent trend is the increased role of social media influencers in facilitating the trade. Influencers are regarded as trusted opinion leaders in their online communities, so their views matter to followers. Some, complicit influencers, promote the illicit wares whilst reassuring potentially susceptible followers that buying counterfeits is both rational and acceptable. This marketplace is highly gendered, and currently dominated by female influencers promoting counterfeit fashion, accessories, jewellery and beauty products to female consumers. There has been no prior research into the impact of influencers on the consumption of counterfeit goods. To address this gap, the Intellectual Property Office (IPO) commissioned the University of Portsmouth to undertake this pilot study based on a quantitative survey of 1,000 female consumers in the UK.

Methodology

The research design involved an anonymous online survey of 1,000 female participants based in the UK. To quantify the level of influence of social media personalities, the questionnaire asked respondents whether they had purchased counterfeit goods in the prior year as a result of influencer endorsements. The survey targeted the female population in order to maximise the efficiency of the pilot study. Industry reports indicate that influencer marketing is highly gendered (Influencer Marketing Hub, 2021; The Week, 2021): a recent study by Klear (2019) found that 84% of influencers who create sponsored posts are female. Preliminary online searches of the YouTube, Instagram and Reddit platforms confirmed that influencer marketing of counterfeit goods is also dominated by female influencers and female consumers. The efficiency of the survey was further optimised by narrowing the sample frame to female participants aged 16 to 60 who use social media at least once per week.

The results cannot therefore be generalised beyond the limits of the sample frame. Furthermore, as the self-report survey inquired into deviant purchasing behaviour, the level of counterfeit purchasing may be underestimated due to social desirability bias (Jann et al., 2019). The survey was administered through the Qualtrics online system and drew on the Qualtrics panel using the representative quotas for age and regional distribution in the Appendix.

The questionnaire was drafted by the research team, peer reviewed by the research staff at the IPO and adjusted accordingly. The survey used the following definition of counterfeit to guide the respondents:

Counterfeits are items that look identical to a genuine product with or without the official branding/logo, but are not made by the brand and may be of lower quality, for example, a handbag of identical design to a “Chanel” with or without the Chanel logo.

The majority of the questions were multiple choice, single answer questions set out on four point scales, for example: not important at all, somewhat unimportant, somewhat important, very important plus ‘don’t know’ where appropriate. This approach allowed the responses to be categorised into two groups for analytical purposes, negative responses, and positive responses. The findings set out in this report use this binary classification. The analysis is based on simple descriptive statistics, tabulated summaries and charts to identify trends.

Executive summary

Important findings

• 17% of female participants have knowingly purchased a counterfeit
• 70% of those who have knowingly purchased a counterfeit are aged 16 to 33, generating 77% of demand
• 20% of knowing buyers are habitual buyers, generating half (53%) of the demand
• fashion, accessories, jewellery and beauty products are the most popular product categories
• 13% of female participants aged 16 to 60 have their purchasing behaviour relating to counterfeit products influenced by social media endorsements.
  - 3% proactively search for counterfeit items, using the social medial (SM) posts to assist in their searches
• 10% are prompted by SM endorsements to buy counterfeits
  - 7% are knowing responders who are aware the products are counterfeit
  - over 3% are deceived responders who are unaware the products are counterfeit
• 70% of respondents who purchased at least one SM endorsed counterfeit item are aged 16 to 33

Conclusions

The main aim of this study was to determine whether social media influencers have a meaningful impact on the intentions of female adults to purchase counterfeit goods. The study found that deviant SM influencers exert a significant influence as trusted others, prompting 10% of respondents to purchase counterfeit goods across a wide range of product sectors.

The most popular product categories are fashion, accessories, jewellery and beauty products. Age is a strong determinant of counterfeit purchasing with younger females five times more likely than older females to buy counterfeits because of postings by SM influencers. The power of the influencers is derived from four factors which make younger adults more susceptible to their influence: younger adults are more susceptible to the influence of trusted others, they are less likely to perceive the risks associated with buying counterfeits, they have a higher risk appetite, and they are more likely to construct rationalisations which justify the purchasing behaviour.

When combined, these factors are a noxious mix that increases the likelihood of deviant purchasing. A key role of the influencer is to assist the consumer in constructing rationalisations that neutralise any residual concerns about personal risks, broader societal harms and perceptions of deviance. Further research is required to understand how and the extent to which the influencers manipulate the four factors in order to overcome these residual inhibitions. An important implication of the research is that policies aimed at reducing consumer demand should take into account all four influencing factors, not just the role of the deviant SM influencer.