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Counterfeits in the cosmetic industry. What effects does this have on seller and consumer?

When we talk about cosmetics, we refer to products used to enhance natural beauty. These things range from eye shadow, lipstick, concealer, and lots more. It is normal for an average person to have a high affinity for cosmetics. This is because almost everyone wants to look good and to enhance their beauty. In this course, many just lay hands on any cosmetic product they can find around without doing any proper investigation on their genuineness. In most cases, they spend a huge amount purchasing such products and major companies suffer from this. They lose revenue and credibility while customers can face major consequences as well.

What makes a cosmetic product counterfeit?

Cosmetics are certified counterfeit when they have substances harmful to the body. These substances include arsenic, cobalt, chromium, copper, mercury, nickel, lead, and aluminum. According to research by certified bodies, fake skincare and cosmetic product have the 5th largest items on sale in circulation nowadays. The rate at which it is circulating has become a worrisome issue because many unsuspecting victims fall into this scam, which is always bad. These products also have quality issues when it comes to packaging. Well-known brands spend a lot of time and effort designing their products while counterfeits opt for a version that is in some part similar but lacks the same material.

How the Cosmetic Industry is losing revenue?

As a result of the high circulation of counterfeit cosmetics in the market, the cosmetics industry has suffered many blows over the years. According to research, the cosmetics industry globally was almost $380.2 billion as of 2019, and it is projected to grow up to $463.5 billion by 2024. Also, in the US, the cosmetics industry has grown up to $90 billion in 2020, and it is expected to grow up to 7% a year for the next five years. Meanwhile, counterfeit cosmetics sales are about $75 million, or almost 8% of total sales. Counterfeits take away a big part of the industry's revenue. And at the same time cause them to lose contracts with retailers and major stores all around the world.

The Financial Impact

There is a terrible huge loss of revenue from the cosmetics industry. This has also caused many unwholesome results, such as huge loss of jobs for many who work for cosmetic companies because the moment there is not enough capital to make new products, there will be huge setbacks. Apart from that, there will always be low demand due to low supply.

How Counterfeit Products Are Low Quality

Based on reports, counterfeit cosmetics are of low quality because they contain bacteria, animal waste, human waste, and harmful chemicals. The combination of these hence results in low quality. Besides that, the environment where these cosmetic products are made is unhealthy. The appropriate body has not certified these environments to carry out such activities and produce such items. Because of these sanitary issues, these products can be very harmful.

How It Affects People's Health

As a result of the condition under which these products were made, there have been many complaints from people who buy them. According to the FDA, their website on cosmetic-related complaints reports that over 12,000 complaints were sent between 2018-2020. Among the most common ones were complaints about consumers having itching bodies, chemical burns, carcinogens, permanent damage, cancer-causing substances, skin disfiguring, and lots more. The side effects of these products have a wide range. Some can cause symptoms only after a short time of usage and some can cause underlying problems that will surface in a few years.

How They Are Made From Cheap Materials

Fake cosmetics are produced in non-sterile environments. This means that these cosmetics brands do not have the legitimate standard as the real ones do. These companies source their materials from unchecked sources with no regard for consumers' health. When you combine low-quality, sometimes even dangerous materials with unsanitary conditions the result are horrific. Well-known cosmetic companies take caution and double-check the quality of the material they use and also produce these products in a clean environment.

The Signs of Fake Products

There are some obvious signs buyers should note whenever they want to purchase cosmetics, these signs will help direct their decision.

The product is available at a shady retailer or an auction site

In a situation whereby a product is so cheap, it is too real to be true, customers should never rush to buy it and not patronize such a seller. Instead, they should buy the needed product from an established marketer.

The package does not look like a real one

Although the fake look real on many occasions, customers can detect the fake products by their color, scent, texture, weight, dimensions, and height. However, it is easier to carry out this feasibility study when the purchase is offline. When customers are purchasing online, they should check for the seller's pictures. If the pictures of displayed products are taken from stock photos instead of customized photos then these should be signs that something is not right. These sellers usually make spelling mistakes on the packaging and online as well in the products description. Major labels double-check every detail of the product.

No Serial Number or Batch Number on Products

These numbers are usually stamped or printed on the bottoms of the package. Fake products do not have these because they do not come from productions sights that are authorized.

Online Negative Reviews from Other Buyers

Online feedback from buyers can show how genuine the cosmetics product is. With a lot of complaints, customers should be able to see how genuine the product is and what kind of harm do counterfeit products cause.

The Content of the Product

Counterfeiters usually do not pay attention to details. even though the packaging seems to be genuine the contents inside can tell a different story. Customers can see a different color of the product that they are used to or there are things missing like brushes or mirrors.

How can NIR WatchDog help companies fight counterfeiters?

What is NIR?

It is a watchdog software that learns the quality of genuine products and enables agents to fish fakes. With the help of NIR tools, there is a quick detection process of fake products within seconds. This has helped in no small way in detecting and reducing the rate at which fake products are in circulation. The software was developed by a team of scientists at Luxembourg University who are interested in curbing counterfeit products on the market

Why Rely on NIR?

As a cosmetic company, you can rely on NIR WatchDog because it is at the core center to fight counterfeit products by all means. This has helped companies to be able to maintain standards and help their buyers to have a stable trust in their products. This move can help eradicate counterfeit and low-quality products that stand as a huge threat to real companies with the help of its detective devices.

How Near-Infrared (NIR) Spectrometer Works

The device uses electromagnetic reflectance readings from a Near-Infrared (NIR) Spectrometer. The scan results are referred to as the comparison algorithm. This algorithm determines with a certain probability whether the product that is scanned could belong to the family of the trained samples' saved previously.


Inspection data is stored in the encrypted database on a blockchain that contains scanned data, digital signature, location, and the hash value of the data. These can be accessed at any time.

Areas of Focus of NIR WatchDog

  • Cosmetics and perfumes

  • Medicine

  • Food production

  • Tobacco

  • and much more

There are several counterfeits circling in several cosmetic retail shops. It can be hard to identify them but with the information provided, you can be aware of the usual ways to save your company from monetary waste as well as the emotional and skin-related challenges that it causes your customers. With NIR WatchDog you can have a more accurate reading of fake products and rule out counterfeits. Saving you time and money at the same time.


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