The Future Laboratory and beauty brand Foreo

March 09, 2020

The Future Laboratory and beauty brand Foreo explore ways to prevent counterfeiting

The Future Laboratory speaks with Evan Feldstein, general counsel and vice general manager of Foreo North America, on how the beauty device brand is tackling counterfeit products in the age of the internet.

Beauty as a category is arguably more personal than a fake leather handbag, and media reports of urine, lead and arsenic in products have highlighted how dangerous this issue can be.

Swedish beauty device brand Foreo creates desirable facial cleansing devices ranging from £29 to £249. Their sleek aesthetic and price points make them tempting to find online at a bargain, and therefore tempting to counterfeit. In January 2019, the brand found itself the subject of headlines because of a car accident in China. A delivery truck had tipped over and spilled over 5,000 fake Foreo Luna 2 facial cleansing devices onto the highway. It was the physical manifestation of a problem that is consuming the beauty industry at large.

While most consumers know that luxury handbags bought online could be fake, the beauty sector has less visibility as a victim of intellectual property (IP) infringement. But it is a considerable problem. Cosmetics now rank in the top-ten counterfeited items in the UK (source: Organization for Economic Co-operation and Development) and the internet and social media has exacerbated it. Copyright protection firm Red Points found that social media now contributes to more than 50% of black market cosmetics sales while eBay contributed to 30% of fraudulent sales. Overall, it is estimated that counterfeit products cost the beauty industry around $75 million. 

A report from brand protection company MarkMonitor found that 25% of consumers have unknowingly bought fake cosmetics or personal care products. Beauty as a category is arguably more personal than a fake leather handbag, and media reports of urine, lead and arsenic in products have highlighted how dangerous this issue can be – in one instance, police found counterfeit MAC lipsticks that contained 300 times the permitted amount of lead. It’s dangerous not just for consumers, but for brands as well. Especially, because 34% of consumers believe that it is a brand’s responsibility to protect them from counterfeiters and 40% complain directly to the brand when they purchase a counterfeit product.

While Foreo creates beauty devices, rather than ingredient-based products, the brand’s reputation is equally at stake when consumers receive products that break within weeks or have leaky old lithium batteries. In our conversation with general counsel and vice general manager Evan Feldstein, we discuss why counterfeiting in beauty has become so widespread, its effect on Foreo’s brand reputation and what they are doing about it.

The Future Laboratory

Why has counterfeiting become more of a prevalent issue in the beauty sector?
One of the reasons, which I think is universal to any type of counterfeiting activity regardless of sector, would be ease. Twenty years ago, when you wanted to get a fake handbag, you had to go to black market areas. You couldn’t go find them online. Then there is cost and production. It has gotten much cheaper to access manufacturers, set up online stores and gain visibility, and that keeps costs down. And production in general in China (where most counterfeits come from) has skyrocketed in the last 20 years [Editor’s note: According to the OECD, 63.2% of counterfeit items accounted for originate from China]. I keep using 20 years as a barometer because that is when the internet, e-commerce, things like eBay and Amazon, really became more prominent.

When you specifically look at beauty counterfeits, there are a couple of factors. More people have an interest in beauty and that’s because the beauty world itself is more sophisticated than it was pre-internet age in terms of products on offer and what goes into a skincare routine. But most importantly, pre-internet consumers didn’t have the constant brand exposure that they do with social media nowadays. People are inundated with desirable beauty brands on Instagram, then they can easily go online, look for a device that usually sells for $139 and find it for $26. They might think they are getting a good deal and might not think that a beauty product would be counterfeited.

It is cyclical though. The more you build demand on the marketing on social channels, the more likely consumers are going to seek these things out, therefore the more people that might infringe on your IP.

What is Foreo doing to actively battle counterfeits?
From day one that I came on, we wanted to strengthen our trademark and design and utility patents portfolio. That’s extremely important to us. That’s the only way that you can truly fight something is if you get your IP in order. Last year, we filed a lawsuit against over 50 sellers on ebay, Amazon and Alibaba – some of which were counterfeits, some which were infringing on our design and utility patents. We were able to (a) remove their pages and their ability to sell these counterfeit devices as well as (b) obtain some monetary compensation, so it was a successful move for us. We will probably do that again in a couple of months. 

We also work with third-party entities globally, which help us take down these infringers. These services scroll through websites and automatically identify listings which would infringe upon our IP rights. In the last year we have removed 35,000 listings but it is like [the arcade game] Whac-A-Mole: somebody opens up an online shop, it gets closed down, so they’ll open up another elsewhere one and so on. It is a never ending battle.

Do counterfeits have an impact on your brand image or brand trust?
It is not something that reflects positively obviously. The last thing we want is for people to be purchasing a Foreo, thinking it’s authentic, only to find that it stopped working after two weeks of use. They will call our customer care line and we will have to tell them: “Actually, this item that you purchased on eBay is illegitimate”. 

The other thing is that we are big into sustainability – we pitch our products as an alternative to the replaceable brush heads of our main competitor Clarisonic. Our devices are supposed to last five to ten years, assuming you take care of it. When people purchase Foreo, they want something that is sustainable and good for the environment, but then it stops working one month later and now they have to throw out this plastic, silicone device and a lithium ion battery. So, it has impacted brand trust a little bit but not to a major extent. Most people who’ve had issues either were willing to take a risk on this $20 device and they know it might not be legitimate or on the other hand, they have reached out to us and we have managed to assuage their fears and inform them on how to spot counterfeits next time. 

The Future Laboratory

How much of it is a consumer awareness issue in terms of not them realizing they are buying an illegitimate product? Are they aware of the challenges or risks counterfeit products pose?
I think some people say to themselves, if I can save $100 now, I’ll try the $20 device. But I think other people look at these listings, and think they are getting a great deal and are surprised. You know, in fashion counterfeit items like Nikes or Louis Vuitton bags are super well known – people know it’s a problem, whereas consumers are less aware that beauty products could be counterfeit.

I don’t think the average consumer knows the risks. In our products, the main risk comes from the lithium ion batteries. We’ve had instances where someone has purchased a counterfeit device and called us when it started smoking. We would collect the device, determine that it was a counterfeit and often it would have a used or low quality lithium ion battery. 

It’s hard to get into the mind of the consumers, but I would say that our primary risk is the batteries and I don’t know how much people associate that with a counterfeit device. When people think of the risks of counterfeit products, they are more likely to think of something like a cream or lipstick, which have ingredients that are absorbed into their skin, than they are a device. They may think: “This is just a vibrating piece of technology, what harm can it do?” 

In terms of letting people know their device is authentic, do you think serial number programs are effective? Do consumers actually register it?
I believe they are very effective. They are very effective for the customer, because when you purchase a device, you can immediately verify it’s legitimate by registering the serial number, which also activates your 10-year warranty. It gives people peace of mind. It is also helpful on our end, because we can weed out the issues that aren’t related to us. So when people call us with a smoking device, we can discover through the serial number that it isn’t actually a Foreo.

We have an excellent warranty, so that gives an incentive to register the serial number.

We have found statistically that more and more people are registering as the brand becomes more well-known. But I think there is a cultural aspect to people who register the serial numbers. We’ve found, across various offices, that people in the US are less inclined to register but our Asian consumers – 98% seem to register the device. It is becoming more prevalent for us, and because we are moving to more app-operated devices, we will [see more registrations].

Is there other technology that might empower consumers to trust the goods that they purchase?
Right now, we have a couple of devices that are app-operated and so by linking it to an app, you can register the serial number and begin using different functionalities. But without registering it, you don’t get the full functionalities available on the app.

We have also thought about integrating smart labels onto the products themselves, but it is not something we are currently doing. One of our app-operated devices, the U.F.O. [which is a device that is loaded with single-use microfibre masks] doesn’t have a smart label itself but the accompanying masks come with a code on their packaging. Users scan the code, which will upload information on the phone in terms of what type of settings the device should use for that mask. We do this so that consumers have the best experience of the device, but it helps us ensure that people aren’t using counterfeit masks, which are becoming more and more prevalent. The app lets you know when you are working with legitimate products and when you are not.

The Future Laboratory

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