A report from the analytics firm Ghost Data has found that Instagram is a hotbed for the buying and selling of knockoff fashion, from fake Chanel bags to dupe Gucci slides to counterfeit Adidas tracksuits.
Instagram has a counterfeit fashion problem
Counterfeit goods used to be sold in secret. Now they’re all over the internet.
According to the firm’s study, published in April, nearly 20 percent of all posts about fashion products on Instagram feature counterfeit products. The study identified more than 50,000 accounts promoting and selling counterfeits, a 171 percent increase from its 2016 analysis, when the firm found about 20,000 accounts.
These counterfeit fashion accounts, which are mostly focused on knocking off luxury fashion, are extremely active; they’ve cumulatively added more than 65 million posts to Instagram, and their activity averages about 1.6 million Instagram Stories a month.
The counterfeit industry nets a global $1.2 trillion every year. The online market is growing at such a rate that it’s even caught the attention of the Trump administration, which recently tasked the departments of Homeland Security and Commerce, among other federal groups, with spending the next few months drafting a plan to combat the sale of online counterfeits.
According to the 2018 Global Brand Counterfeiting Report, luxury fashion brands lose about $30.3 billion worth of sales to fakes online alone. The most counterfeited fashion brands on Instagram, according to Ghost Data, are Louis Vuitton, Chanel, Gucci, Nike, Fendi, and Balenciaga. The sale of knockoff products from these brands doesn’t just hurt their integrity and bottom line; counterfeits have also been linked to funding terrorism and other rings of criminal activity.
As Ghost Data’s analysis notes, it’s a major issue that Instagram is helping inject a once-covert underground economy into the mainstream. Thanks to the web, tens of thousands of counterfeit businesses can set up shop on Instagram and seamlessly peddle their wares online to shoppers who are hungry for luxury products but don’t want to pay top dollar.
To be fair, Instagram isn’t the only tech company helping the counterfeit industry grow; counterfeiters on Instagram, for example, are taking payment via WeChat, PayPal, and Venmo. Counterfeit sellers are also connecting to buyers via WhatsApp. There are plenty of sites with unknown origins that sell fashion knockoffs, alongside legitimate ones like Amazon and eBay. The nature of social media platforms like Instagram, though, has made counterfeits explode. Instagram users, for example, are able to take advantage of algorithms by using the names of luxury brands in hashtags. Followers looking for Gucci products can search the hashtag and easily stumble onto counterfeits, as these illegal products are present in the same feed as those from small boutiques and independent resellers.
Instagram’s Story feature, in particular, has also been a way for the online counterfeit economy to grow. Counterfeiters frequently post to Stories because the content disappears in 24 hours. The analysts from Ghost Data were able to identify specific accounts that have grown popular because of the Story feature, including one that posts videos directly from a factory in China that makes counterfeit Adidas Yeezy sneakers.
In an email to Vox, an Instagram spokesperson wrote that the sale of counterfeits on the platform is illegal, and that it works closely with law enforcement to track down offenders and kick them off the platform.
“We want our community to have great experiences with businesses on Instagram and we take IP rights, including issues around counterfeiting, very seriously,” Instagram told Vox in a statement. “We have a strong incentive to aggressively remove counterfeit content and block the individuals responsible from our platform. We have devoted more resources to our global notice-and-takedown program to increase the speed with which we take action on reports from rights owners. We now regularly respond to reports of counterfeit content within one day, and often within a matter of hours. Additionally, we continue to proactively fight against bad content, including content that may offer counterfeit goods, with sophisticated spam detection and blocking systems. Because many counterfeiters try to promote their services through spammy behavior, we’re able to quickly remove this type of content, even without a report.”
But as Ghost Data’s study notes, Instagram’s counterfeit problem is only growing. And the analysis comes at a pretty pivotal moment for the social media platform, as it’s been pushing hard to become a top shopping destination.
In March, Instagram announced it would introduce a shopping feature, “Checkout With Instagram,” which would allow Instagram users to shop directly from the app. Facebook, Instagram’s parent company, also just announced it would make the posts of some influencers shoppable.
As Ghost Data notes, “Instagram is becoming our mall of choice.” More people are turning to the platform to shop, get style ideas from influencers, and build careers. But combating an illegal industry as sophisticated and vast as counterfeit fashion will take some serious muscle, beyond building an algorithm or two, and it’s safe to say that Instagram will remain swimming in counterfeits until it’s ready to truly focus on the problem.
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