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05 May 2020
BY Gaelyn Scott

South Africa: COVID-19, Amazon and the changing face of brand enforcement

The Coronavirus (COVID-19) has changed the world dramatically. It has certainly changed business, with many of us now having to work from home. It has changed the way we shop, with many more of us now shopping online. It has affected many businesses very badly, yet some have profited handsomely. None more so than the king of online shopping, Amazon.

The statistics are astounding: customers spend USD11 000 every second on Amazon products and services; the company has captured some 50% of the US ecommerce market; the company is in the process of hiring tens of thousands of new staff members; Amazon’s share price is at record levels; and the personal fortune of founder Jeff Bezos has grown by some USD24-billion.

As The Guardian newspaper put it recently, “Amazon is having a great pandemic” and it is the “clear winner from the COVID-19 crisis.” The media have even suggested the pandemic has made Amazon a “public utility”, which doesn’t sound so silly when you consider that US Vice President Mike Pence recently sent a tweet to thank Amazon staff for “working every day to meet the needs of the American people as we face this pandemic together.”

Meanwhile, Daniel Bennet of Corsearch, an online brand screening, searching, and investigation company, has written an interesting two-piece article entitled “COVID-19 and Counterfeiting: How the pandemic is reshaping brand protection”. Bennet makes a number of points:

  • As a result of the pandemic, a very serious recession (if not a depression) is now clearly on the cards. Sectors that have been particularly hard hit include aviation, hospitality and events.
  • Just as the social isolation caused by the SARS epidemic in 2003 led to a huge rise in mobile data usage and online shopping in China, the same thing is happening now in the rest of the word. People who are stuck at home realise that they need to adjust, but that certainly doesn’t stop them from shopping.
  • Ecommerce is on the rise, as Amazon’s amazing success shows.

Bennet goes on to suggest that, as a result of the resumption of the Chinese supply chain (with China having seemingly moved on somewhat from COVID-19), the surge in online shopping, and an immediate reduction in household income, we are facing a “perfect storm” as regards cybersecurity and brand integrity. He says this: “Even at this early stage this has encompassed new listings of counterfeit goods, new forms of counterfeiting, and the development of a series of other assorted scams and malicious activities designed to exploit the situation.”

Bennet makes a few short, medium and long-term predictions:

Short term

There has already been significant counterfeiting activity in product areas such as face masks, sanitisers and Coronavirus test kits. As a result, brands that operate in the fields of medical devices and pharmaceuticals have already been impacted.

But brands that traditionally have counterfeiting problems in physical markets (fashion, sportswear, luxury goods, tobacco and the like) will also start to feel the effects as regular enforcement actions such as customs checks and physical policing reduce because of other pressures on enforcement authorities. These brand owners should seek to counter the impacts by focusing on online monitoring and removals.

Medium term

There is clearly a move towards online shopping. Shoppers will be looking for bargains. This opens new opportunities for counterfeiters, and there will be ever-more counterfeit listings. Bennet suggests that brands involved in gaming, film and music, foods and beverages, fashion and sportswear should be very aware. His advice: “Anticipate this new peak by finding an enforcement program that can encompass marketplaces, domains and social media adapted to your specific region and audience.”

Long term

Online shopping is likely to become the norm and brand owners will have to address this through new online monitoring and enforcement strategies. This will be the case even in product areas where shoppers are older and online shopping is less prevalent, such as pharmaceuticals, medical devices, hobbies, travel and leisure. Brand owners should also take account of the fact that global supply chains might become less China-centric.

Bennet suggests that product areas that are likely to thrive in the longer term include tech and wearables (webcams, computer peripherals, mobile phones), certainly if the trends of telecommuting and online meetings continue. One product area that might struggle in the future is automobiles, especially if working from home becomes the norm.

Clearly Bennet is someone who is in the business of selling brand monitoring and enforcement solutions, but that does not detract from the fact that there is much food for thought in his observations. Brand owners should be thinking far more about the online threats and the monitoring and removal of online trade mark infringements. The obvious forerunner to infringement actions, is ensuring that your brands are registered as trade marks, to ensure easier and more effective legal action.

Gaelyn Scott
Executive | Head of IP
gscott@ENSafrica.com
+27 83 632 1445