According to Morgan Stanley's prediction, Amazon will become the largest beauty retailer in the US by 2025, in fact, this platform is also attracting more and more high-end beauty brands and giants' attention, such as Kiehl's, Lancôme, and Urban Decay under L'Oréal Group; Clinique under Estee Lauder Group and Shiseido Group have all set up shop on Amazon.

However, in the process, they are increasingly encountering "ambushes" by unknown vendors on Amazon, who openly sell counterfeit products of popular brands or independent brands on the platform, which has made brands realize that the e-commerce giant may very well be the culprit behind the intellectual property issues.

Is there a problem with the platform search?
Fake products are actually competing with genuine ones on the same stage.

"Today, searching for any popular beauty product on Amazon will likely reveal it alongside a slew of 'visually similar' knockoffs in the search results. It's hard not to feel that the platform's search engine is 'seriously flawed'," says Liz Flora, a columnist for Business of Fashion, an overseas fashion and finance media outlet.

When Flora searched for the No. 1 bestselling beauty product on Amazon - Hero Cosmetics' Mighty Patch acne patches - she discovered that next to the official Hero Cosmetics authentic product, there was a brand called "Breiboz" with "identical" acne patches that looked almost exactly the same as the authentic product. When she searched for Milk Makeup's viral lip product, "Cooling Water Jelly Tint," she found another result with packaging that was exactly the same as the authentic Milk Makeup product. Finally, when Flora searched for Rare Beauty's star product, Soft Pinch blush, she found yet another "fake" product with packaging and shade that were exactly the same as the authentic product. The bottle had the brand name "Lakerian Beauty," but the font used for the printing was even identical to that of Rare Beauty.

What's more troubling for brands is that consumers are also accepting these counterfeits: On September 23, a brand called "Daolyo" even made it onto Amazon's beauty brand bestsellers list, despite disappearing from the list later, Hero Cosmetics brand-related staff told BoF they were "very frustrated" that fake products were able to make the list.

In the cosmetics industry, counterfeiting is not a new phenomenon, but the latest trending beauty products on social media have given fraudsters a "new idea": they often register a new beauty brand trademark and then produce packaging that is "extremely similar" to the genuine products, filling them with their own products. Even worse, they will directly copy the promotional pictures of the genuine products and put them on their own shop page.

After Touchland's hand sanitizer became popular online, the company's CEO, Andrea Lisbona, noticed that a huge number of counterfeit products with the same packaging as theirs had surged on Amazon, with some even directly using their brand's photography work, only erasing the Touchland trademark.

Madigan Lyden, senior director of brand strategy at e-commerce company Front Row Group, said: "When a product goes viral, we see a surge in counterfeit activity."

According to Leiden, "most" counterfeit issues occur on Amazon. The group works with several beauty brands, including Ouai, Bubble, and Summer Fridays, to develop an Amazon strategy for customers. "Counterfeiting has become very serious, especially this year," Leiden said. As a result, the group has had to invest more resources in brand image protection and hired brand protection specialists to help address the issue.

"I think Amazon should step up its protection of intellectual property for brands that are selling on its platform, at least starting with optimizing search," said Steve Strong, chief operating officer of consumer brand accelerator Super Ordinary. "Now, if a consumer searches for their favorite beauty brand and cosmetics on Amazon, it will provide a bunch of alternative products that look similar, and I don't think that's a good thing."

"Rat-catching fraudsters" is fraught with difficulties.

Flora pointed out that some people may blur the line between counterfeit products and the popular "dupe" products among beauty enthusiasts, but they should never be confused with each other.

"The counterfeiters are trying to position themselves as being on par with brands like e.l.f. Beauty, Nyx, or Wet n Wild, because those brands also produce similar products to high-end luxury beauty brands, but at a lower price point. These products are often used by beauty influencers on social media to compare with high-end products. However, these mass-market brands all have their own distinct brand image and formulations that are entirely different from the counterfeiters," Flora said.

Meanwhile, brand owners say that in order for Amazon to delist the fake products, they need to go through a lot of bureaucratic processes. First, if a brand wants to request delisting of the counterfeit products, the brand owner must ensure that their design and packaging have trademark protection, and that their packaging design also has patent protection. "Without patents or trademarks, anyone who wants to copy our packaging can do so at will," says Lisbon.

Secondly, brand owners must also take a proactive approach and report counterfeits themselves, rather than waiting for Amazon to handle it. While Amazon has also been strengthening its intellectual property protection tools. However, with counterfeits running rampant, beauty brands cannot afford to sit back and do nothing. They are seeking third-party services to track and report infringements, while other companies are taking legal action directly against manufacturers.

"Any product that looks like our brand, we will report to Amazon for violating packaging intellectual property rights," Strong said.

However, even if brand owners have strong evidence and valid reasons, it is difficult to catch all counterfeit products. For example, hand sanitizer brand Touchland has patent rights to its signature bottle design. In the past two months, the company has discovered 5,000 counterfeit products worldwide that infringe on its intellectual property rights and appear on various e-commerce retail platforms, including Amazon, Alibaba, and Shein.

"It's almost like playing a whack-a-mole game. You knock one down, and they pop back up again in no time," Lisbon said.

Hit the source directly.

To tackle the issue of counterfeit products, some brands have completely bypassed Amazon and taken matters into their own hands by directly approaching manufacturers of fake products and seeking compensation.

On August 23, DIY false eyelash brand Lashify won a $30.5 million (approximately RMB 214 million) compensation and a 30% royalty fee in a lawsuit against Lashbeauty Cosmetics Co., Ltd. in Qingdao. The jury found that false eyelashes produced by Lashbeauty had infringed on three patents owned by Lashify. According to Lashify's claims in court, many of the infringing false eyelashes were sold on Amazon, while others were distributed to legitimate brands.
"Counterfeits on Amazon are a terrifying prospect for any original brand," says Sahara Lotti, founder and CEO of Lashify. "They can wipe you out in just a few months, leaving you bankrupt." Lotti also notes that these "rogue" sellers can "completely flood the market," making it impossible for consumers to find genuine products.

However, fully launching legal proceedings is expensive and risky, especially for small startups. Lotti says that the main purpose of the lawsuit is not to fully recover losses, but to prevent others from producing counterfeit products of the brand in the future.

Due to its huge scale, it is virtually impossible to completely control counterfeiting. Meanwhile, some brands have gained attention from mainstream society by venturing into the gray area of counterfeiting.

For example, the Australian brand MCoBeauty proudly positions itself as a "luxury beauty affordable alternative," with its products on Amazon being very similar to those of high-end beauty brands such as Charlotte Tilbury and Sol de Janeiro.

"We strictly adhere to copyright and trademark laws, and our brands are not allowed to copy the packaging elements of other products," says CMO of MCoBeauty, Meridith Rojas. "We ensure that all of our formulas and packaging comply with these regulations."

Additionally, although beauty enthusiasts are fascinated by all "dupe" products, beauty influencers are also helping educate their followers about the differences between authentic, dupe, and fake products, and warning them not to buy counterfeit products from suspicious sellers on platforms such as Amazon or TikTok Shop.

On the other hand, Amazon has been constantly adding new features and announcing its efforts to combat counterfeit and substandard products. In 2022, the company launched a patent enforcement program called "Amazon Patent Review Express." In its 2023 Brand Protection Report, the company observed that the total number of effective copyright infringement reports across all categories on its platform had decreased by 30%, and has adopted machine learning to detect "complex visual intellectual property" infringement.

"But brands cannot rely on them alone," Lisbon said. "When there are daily instances of infringement, you must be highly vigilant and promptly address them, rather than sitting back and waiting for consumers and platforms to solve all the problems."