Why Instagram has become the biggest platform for counterfeit sales on Runet

Working for BrandSecurity, we help brands from all over the world to protect one’s intellectual property and rights on the Internet. One of our main activities is fighting against counterfeit products that are widely sold on the Russian Internet.

We have tried to figure out how counterfeit items are distributed by means of contextual advertising and coupon websites but today the biggest Runet platform for counterfeit sellers is Instagram. In this article we will explain why this is so and how brands can protect their rights on social media.

Instagram and counterfeit goods: things are getting worse

Our company processes thousands of applications per month in the fight against the distribution of counterfeit goods on the Internet and on Instagram, in particular. We therefore decided to evaluate the scope of the problem concerning the world’s biggest photo app. We started by counting the number of accounts, the owners of which are selling counterfeit goods of different kinds and we analyzed their marketing strategies. Here are the results.

According to our analysis, the number of Instagram accounts connected with the sale of replicas or copies of famous brands on Runet is between 6000–10000.

The most popular categories among counterfeit sellers are bags, shoes, and clothes of famous brands (especially luxury ones). Watch brands, perfume and cosmetics’ manufacturers are affected too, and there are accounts that sell counterfeit popular gadgets. Instagram shops sell counterfeit goods of Russian brands as well.

The number of followers of such accounts can reach hundreds of thousands while 17 million users follow these sellers of fake goods.

Popularity of fake accounts in different categories of goods

The list of violations is not confined to counterfeiting: many sellers use trademarks improperly or pretend to be official brand accounts while they are not.

Fake goods’ sellers are using new tricks to mislead users. Social media is not the only means. For example, counterfeit goods are widely sold via real Internet shops. Such websites can copy the design of official sources — it’s possible to find credible numbers of 8–800. In addition, the addresses of showrooms in the centre of Moscow are duplicated and and even the how-to-identify-the-counterfeit-product instructions have been known to be copied. A popular Instagram account is another means of gaining the trust of potential customers.

Typical account, selling fake products: its owners provide wholesale of luxury goods

Why it is so: two main reasons

A serious problem that affects the protection of the rights of brands is the low legal literacy of Russian social media users, including those who are trying to use them in the development of their business. Many counterfeit sellers are sure that if the account description says the product is a copy or a replica, then they are not breaking any rules. In fact, it is not so.

Another popular account with more than 100 thousand followers: its owner says it sells ‘exact copies’.

Under Russian law, goods, labels, and packages that have another trademark or a sign similar to the extent of creating possible confusion, are counterfeit.

The second problem: selling fake goods is not shameful in Russia. It results in the endorsement of famous bloggers and celebrities to advertise showrooms, bags, shoes and, watches that imitate goods of famous brands.

It is considered normal to promote those who are breaking the law and spoiling the business of original goods’ sellers. The result is profitable for everyone except for the copyright holders. Bloggers and celebrities earn money by advertising fakes while their sellers are getting more clients and money that is invested into new adverts.

Russian TV host Olga Buzova is advertising an account, selling counterfeit sneakers

This account looks like this:

Its administrators warn the followers about ‘banning working accounts on Instagram’

How brands can defend their rights

Manufacturers and distributors suffer multi-million dollar losses, caused by counterfeit sellers’ actions on the Internet. Businesses may even be forced to give up the distribution and sales development of products of famous brands as the Russian market is flooded with fake goods and it’s practically impossible to find original products. In some cases that we came across, it was so widespread that 9 websites out of 10 in the Yandex top search results offered counterfeit goods and so did contextual advertisements.

Many representatives of trademark owners give up in such cases. They are just not sure whether it’s worth swimming against the current and fighting the swindlers. Actually, it is worth it and the chances of success are not insignificant.

It’s important to understand that social media and Instagram, in particular, are interested in defending intellectual property and it’s written in the app’s terms of use.

Instagram is interested in helping users and organizations to defend their intellectual property rights. Terms of use don’t allow posting content that violates one’s intellectual property rights, including copyright and trademarks.

It means that in cases of the sale of counterfeit goods and the improper use of intellectual property one should contact the administrators of the social net — Instagram has a special application form for this. You can complain to counterfeit distributors on Russian social media as well — ‘Vkontakte’ also has a corresponding form.

Instagram administration usually reacts quickly to complaints: it takes from 3 to 24 hours to consider the application. In our experience, sometimes such accounts were blocked within 40–50 minutes of the complaint.

There is no doubt that with lots of counterfeit sellers it is difficult for brands to monitor their appearance and activity on their own. Companies like ours are ready to help.

We search for the violations and act according to Instagram’s recommendations. Before complaining we can contact the owners of such accounts and try to solve the problem. If the user settles responds positively, we have no more claims, otherwise we apply for the particular posts to be deleted and sometimes administration bans the account.

This systematic approach helps ban hundreds of accounts, that sell replicas of famous brands. It’s important to inform users about the inadmissibility of selling and advertising counterfeit goods. Success may take time but it’s necessary to persevere, so that there is a chance to stop this destructive tendency. For example, nowadays due to right holders’ efforts we cannot imagine a famous blogger or celebrity advertising a piracy website with TV shows or premieres.

Tips for customers: how to avoid buying fakes

Here are some useful tips for social media users who want to avoid buying counterfeit goods:

1. Be careful when sellers offer products of famous brands at a 50–90% discount. An original item — a bag from a new collection, popular cosmetics, watches or sneakers — can’t have a low price. It’s financially inappropriate for official distributors. To be safe, you can compare prices, offered by different sellers — it’s desirable that these are well-known chains or online shops. If the price varies by 30%, stay away from such accounts. A bag of a famous Italian brand from a new collection can’t cost 3000–5000 roubles when it costs 20000–30000 roubles on the official website.
2. We don’t recommend that you buy goods via social media (Vkontakte, Instagram) as practically all the commercial private accounts, especially specializing in luxury goods, are selling products of dubious quality. Sellers may try to impress you by calling their goods original, authentic, exact copies or replicas — the quality isn’t getting better anyway.
3. If a seller — in our technological era — takes cash only, it’s another sign that ‘original winter shoes that cost 4500 roubles’ are probably fake.
4. Reading comments is very important, but you shouldn’t read those written on the seller’s website or account. Before transferring money or going to the showroom for clothes of your favorite brand at a 70% discount, spend 3–5 minutes on googling reviews. Someone is likely to have had problems with the seller and written a comment about the quality or service provided by this particular online-shop.
5. Common sense is also helpful. If you see watches, shoes, or bags of famous brands at very attractive prices at so-called discounts while the shop doesn’t have its own office building where you can get your order and you can only pay in cash to the courier, ask yourself: ‘Will a world famous brand develop such sales channels?” The answer is, “Definitely not”.
6. Another way to identify the swindler is to look at the date of the website creation and the information about its owner. If the website says that they, “have been successfully working for more than 5 years and have hundreds of happy customers”, while the domain was registered 1–2 months ago and is in a private person’s name, then you are probably dealing with counterfeit goods. And if you want to get your money back, the chances of success are low.

These tips are necessary only for those who aim to buy original products and don’t want to support counterfeiting. Many users buy fakes on purpose, wanting to save money. But in this case one should be ready to face problems with the quality of their goods’ and face difficulty in getting their money back if their is a dispute.