The US Census estimates that total e-commerce sales reached $870.8 billion in 2021, a staggering 14.2% increase from 2020. The top four global online markets alone receive nearly 8 billion visits per month, and that’s only a fraction of the total number. reported online market visits. In an EverC survey conducted in November and December 2021, 72% of shoppers say they use e-commerce marketplaces once a month or more.
However, customer loyalty to individual brands has plummeted and shoppers are experimenting with new shopping alternatives at an unprecedented rate. In fact, 75% of US consumers have tried a new shopping behavior in response to economic pressures, store closures and shifting priorities over the past two years. Although businesses replaced government and the media as the most trusted institutions in 2021, 74% of consumers say they will stop buying from brands that break their trust.
This means that to thrive today, businesses must maintain customer trust or risk losing market share and revenue. Brand trust and reputation now require more than lip service – they are going from nice to have to fundamental requirements for doing business in e-commerce. Yet, at the same time, we are also seeing explosive growth in the sale of counterfeit and pirated goods in the digital world, especially on popular e-commerce platforms and online marketplaces such as Amazon. And each such sale not only poses a threat to consumer confidence, but the risks can extend to physical, legal and financial damages.
To understand the extent and impact of marketplace fraud, consider this: Nearly $1 trillion worth of counterfeits flood the global economy each year. Amazon blocked 10 billion counterfeit registration attempts in 2020 alone while seizing more than 2 million counterfeit products. And most counterfeits are ordinary consumer items that people trust, like infant formula, hand soap and bicycle helmets, not exotic couture products.
The e-commerce crisis
Selling counterfeit products or controlled substances can result in legal action, hefty fines, and regulatory exposure. They also have a direct impact on brand trust for e-commerce marketplaces. Four in ten consumers (41%) say their experiences of receiving fraudulent products have negatively impacted their willingness to purchase from e-commerce sites, while 88% of Americans believe that e-commerce marketplaces should be held responsible for counterfeit and illegal products sold on their websites. .
Online retailers may feel that they only need to focus on their own compliance strategies to protect themselves from these risks. However, the damage to brand trust ripples through the entire market experience. When consumers have an unfavorable experience with an online marketplace site, they can easily lose confidence in the whole process. They may feel that shopping on individual brand websites or, as the pandemic recedes, in physical stores brings them greater reliability.
The risks posed by counterfeit products are unsustainable for online marketplaces and unacceptable for online consumers. That’s why SaaS products are now being developed to quickly deliver what no human process ever could: the ability to identify and eliminate malicious listings among the billions of items for sale online.
Driven by artificial intelligence and machine learning, these platforms can identify illicit products at scale to provide brand protection and regulatory compliance. So, with greater visibility into the dark corners of the web, e-commerce marketplaces can act to weed out counterfeit products, provide safety and peace of mind to buyers, and uphold both their reputation and bottom line. .
Written by Noam Rabinovich, co-founder of EverC