Counterfeiting as a hidden tax on growth: why brands are losing sales on marketplaces

How counterfeiting affects sales: invisible losses

With the growth of e-commerce, rights holders are increasingly encountering illegal sellers, counterfeits, and intellectual property violations. A brand may invest in promotion, improve product listings on marketplaces, increase its advertising budget, and work on product quality, but part of the benefit from these efforts will go to sellers who exploit someone else's reputation without investing in brand development. For businesses, this turns into a kind of hidden tax on growth.

The first and most obvious consequence of the appearance of counterfeits is a direct reduction in sales of the original product. A customer looking for a well-known brand on a marketplace often faces dozens of similar offers: some use the brand name or a similar designation, photos, and descriptions of the original product, as well as imitating the packaging design.

But the losses do not stop there. For example, if a customer purchases a low-quality counterfeit, they do not always realize they have bought a fake, but the negative experience is associated specifically with the brand: trust in the product declines, the load on customer support increases, and negative reviews appear under the official seller's listings. Similarly, counterfeit goods sold at dumped prices can lower the ranking of the original product in marketplace search results. Ultimately, the damage from a single counterfeit on the market extends far beyond a single lost sale.

What makes up business losses

The exact amount of losses is always specific to each case and depends on the product category, brand awareness, and the scale of violations (in some categories, the number of suspicious offers can significantly exceed the number of official product listings).

These losses consist of several factors.

• Lost profit. Every product listing with an illegal offer competes with the official product for the same customer. Not every customer who chooses a competitor's offer is buying a counterfeit. However, the loss of even a fraction of customers directly impacts the brand's turnover.

• Marketing investments that benefit competitors. The company continues to pay for product promotion, while a portion of the traffic is captured by an unscrupulous seller exploiting brand recognition.

• Reputational losses. A low-quality counterfeit creates a negative perception of the brand as a whole in the eyes of the consumer. Restoring trust requires additional expenditures on communications, review management, and marketing.

• A separate expense item is the cost of addressing the problem: legal support, staff time spent monitoring the market, and preparing complaints for marketplaces.

The scale of e-commerce is changing the approach to brand protection

Just a few years ago, a company could manually monitor several dozen product listings. Today, the situation has changed, and such an approach requires significant time resources, making it difficult to cover the full scale of violations. While an employee identifies one violation and prepares a complaint, dozens of new ones may appear.

Furthermore, employees often identify only obvious cases: the use of a logo or direct copying of a name. More complex violations, such as the use of similar designations or hidden keywords, require automated analysis and the application of specialized technologies.

As a result, brand protection is gradually shifting from a reactive approach to systematic work with violations. Modern technologies help companies move away from spot searches and transition to continuous monitoring, namely:

• regularly tracking the appearance of new offers on marketplaces;

• identifying suspicious product listings;

• analyzing intellectual property rights violations;

• generating reports for the rightsholder;

• reducing the time spent preparing appeals to marketplaces.

Thus, searching for violations, analytics, and the work of lawyers with marketplaces are combined into a single system for handling violations in the digital environment. Instead of spending resources

Monitoring results using the example of Dreame

Monitoring data demonstrate the scale of the problem even for a major brand. From March to June 2026, 3,529 listings associated with 712 sellers were identified in connection with the Dreame brand across Ozon, Wildberries, and Yandex Market.

The peak was recorded in May, with 1,348 listings involving 372 sellers. In June, the number of identified listings fell to 1,134. However, Ozon saw an increase, from 640 listings in May to 905 in June.

After verification and the elimination of potentially inaccurate detections, complaints were filed against 302 sellers covering 2,371 listings.

The results varied across platforms. On Ozon, 404 out of 423 listings (95.5%) were removed within one seller cluster, while 684 out of 1,070 listings (64%) were removed in the main cluster. On Wildberries, 242 out of 278 listings (87%) were either removed or taken out of search results. On Yandex Market, 506 out of 600 listings (84%) were removed.

Overall, this means that approximately 78–80% of the infringements identified for Dreame were resolved in the cases where complaints were filed.

At the same time, monitoring makes it possible to assess not only the initial outcome but also the platforms’ response times. For example, for one of the Dreame clusters on Ozon, the median time from detection of an infringement to blocking was 3.9 days, with an average of 4.5 days. For the main cluster on Ozon, the median response time was 16 days. Importantly, the detection process itself is fully automated: marketplaces are monitored weekly, and once an infringement is confirmed, a complaint is generated and submitted on the same day. Therefore, the figures above reflect the actual response time of the marketplace.

The system also tracks repeat infringements. Among Dreame sellers in the main cluster, 19 out of 73 (26%) returned with new listings after being blocked, resulting in 209 new infringements. In another Dreame cluster on Ozon, only 6 out of 229 sellers (2.6%) returned, creating a total of 12 new listings. This makes it possible to continue monitoring sellers who have already been identified as infringers rather than starting the process from scratch after the first wave of complaints.

Thus, the Dreame case demonstrates that automated monitoring is not a one-time marketplace check, but a continuous cycle: detection → verification → complaint → outcome tracking → detection of repeat infringements. For a brand, this means the ability to systematically reduce the number of infringements and prevent previously identified sellers from returning to the market.

How clothing design infringement led to over 6 million rubles in compensation

One example is a case involving the infringement of exclusive rights to children's clothing designs. Unscrupulous sellers offered and sold products featuring the right holder's modified designs both online (Wildberries) and offline through a retail chain. To protect these rights, market monitoring was conducted, evidence of the infringement was collected, and a legal claim was prepared. As a result, sales of the counterfeit products were halted, the copyright infringement was stopped, and the right holder received compensation exceeding 6 million rubles.

Brand protection is becoming part of the growth strategy

The growth of e-commerce is causing intellectual property protection to cease being a purely legal task. If a company invests millions in brand creation but fails to monitor its use online, a portion of that investment begins to benefit competitors. Counterfeit monitoring is gradually becoming a standard part of business processes. Ultimately, it is not just about protecting intellectual property rights, but also about safeguarding the investments the company has already made in brand development.