Counterfeit goods are flooding the South African market, without perpetrators being subjected to the might of intellectual property and trademarks laws, says the e-commerce sector.
Alastair Tempest, CEO of E-commerce Forum South Africa (EFSA), says the failure of the authorities to identify counterfeit goods from e-commerce sites is leading to consumers increasingly falling prey.
The Consumer Goods and Services Ombud (CGSO) tells ITWeb that while it has not seen a spike in complaints in this category, it has taken a particular interest in the counterfeiting outlook over the last year.
Since October 2023, around 5% of the 2 292 e-commerce complaints received by the consumer watchdog were related to counterfeit goods sold online, it says.
The growth of online shopping over the past few years in SA has made online platforms a breeding ground for counterfeit goods, as marketplace sellers and scammers stop at nothing to exploit unsuspecting shoppers.
“While the CGSO has not seen a significant increase in this category, we strive to educate consumers and the larger industry on ways to protect oneself from falling victim to counterfeit goods sold online,” says ombudsman Liaquat Soobrathi.
“From the complaints received at the CGSO, the majority of these relate to clothing, footwear and cosmetics. The top three categories of complaints relate to the larger e-commerce platforms that offer third-party entities to market and sell their products on these platforms, but the CGSO has not received a significant number of disputes to establish a trend in these areas.”
Last month, South African fashion designers converged at the Sandton Convention Centre during the Buy Local Summit to protest the proliferation of counterfeit goods and illegally imported garments.
Tempest says while there has not been a significant rise in consumer complaints received by the CGSO, this may be because victims do not always think of immediately complaining to such bodies when realising they have fallen victim.
The lower cost of fakes is a key factor contributing to more e-commerce sites selling counterfeit goods, he notes.
“The indifference of consumers is also important in the failure of the authorities to identify and remove counterfeiting. Counterfeit goods are almost always cheaper than branded goods. Cheap often means fewer (if any) standards are applied in manufacturing processes,” explains Tempest.
“According to information we have received, the South African Bureau of Standards (SABS) does not control/test goods bought abroad online by individuals.
“Consumers therefore can buy goods that do not reach SA standards – including dangerous products – from foreign e-commerce companies without receiving due warnings. We believe the SABS’s mandate should be increased to allow it to test such goods in the case of volumes imported into SA, and warn consumers if toxins, etc, are found.”
According to Tempest, counterfeit luxury branded goods, clothing, electronics and software are among the most popular categories of items sold online – with some posing serious safety risks and contributing to economic losses in SA.
“Luxury branded goods are always the most profitable for counterfeiters to copy. Copies of costly items will always attract scammers – clothing, jewellery, handbags, artistic goods and so on.
“Electronics are another popular victim of counterfeiting – with the added danger that these can be dangerous for the consumer, as they are not manufactured to international or national standards. Software, digital recordings (music, films, etc), online games are very often the victims of counterfeiters. In some cases, using such illicit products can seriously damage mobile phones and PCs, and/or users’ data can be stolen. Even foodstuffs and alcohol can be counterfeited,” Tempest points out.
According to the Consumer Goods Council of SA, it is estimated that counterfeiting could account for as much as 10% of the South African economy.
Tempest says the Counterfeit Goods Act of 1997, and the laws related to intellectual property and trademarks are the main lines of legal defence against counterfeiting.
While nothing can guarantee 100% security, barcodes and QR codes can help to reduce online counterfeiting.
Tempest states: “One of the best ways to protect against counterfeiting is the use the GS1 barcoding/QR coding on goods. Not only is this the backbone for stocking and warehousing of goods, but the international aspect of GS1 allows checks to be made to prevent counterfeiting.
“The system is used by Takealot, Massmart, Amazon and many other e-shops. EFSA notes there have been cases of the illicit use of barcodes/QR codes by scammers. Barcodes/QR codes in these cases are scraped off other products, and applied to the counterfeit goods. However, the GS1 databases can quickly identify such misuse of barcodes/QR codes.”
Discussing the punishment for sites/sellers who are found guilty, Soobrathi points out: “According to the Counterfeit Goods Act of 1997, any person convicted of an offence referred to in section 2(2) of the Act, will be punishable, in the case of a first conviction, with a fine, in respect of each article or item involved in the particular act of dealing in counterfeit goods to which the offence relates, that may not exceed R5 000 per article or item, or with imprisonment for a period that may not exceed three years, or with both.”
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