The Grey Area in South African Beauty: Understanding Legitimate Trade, Diversion, and Counterfeits. It's time someone set the record straight.
*Long read*
If you'd like to skip the long read or come back sporadically, we'd like to invite you to join a waitlist to ATG Greycheck® here. This app (currently in development) aims to help you identify unauthorised retail while rewarding you for it, sans blah blah (as the French say). *All photographic proof of claims below are posted in the album on the homepage of our BMAC (we were unable to link directly).
Recap:
Back in May/June this year (2024), we published this article after South African beauty consumers began to suspect that the Sol de Janeiro they were then purchasing from retailers such as Dischem, Superbalist and Takealot was 'suspicious'. It's important to note that we do not suggest that Sol de Janeiro (or any other brand) is responsible for what happened here in South Africa (diversion of supply is a common feature in marketplaces), nor are we implying that the goods sold were counterfeit, per se. At this time, there is no conclusive answer as to the authenticity, only answers to the fact that the brand(s) disclaimed these partnerships (proof 🔗 on homepage) while the chain of custody couldn't be confirmed. As for the authenticity, the public will likely never know...unless we hold retailers accountable. While the brand's (Sol de Janeiro) inventory got diverted without their knowledge, let's be very clear about accountability obligations: It was (and is) the 1) lack of due diligence and lack of domain authority from retailers and 2) a rogue supplier within South Africa, flying too close to the...ahem...SOL.
We have been documenting--mostly for ourselves--the 'grey and counterfeit phenomenon' in South Africa for just over 3 years, going on 4 as a business case. In fact, it was one of the key pillars that urged us to start straål, albeit without huge traction: we noticed that beauty consumers in SA are consistently being duped by current resellers and marketplaces, that there exists demand for certain niche categories in beauty and that trust/disclosure needs to be woven back into a broken system. We liberally shared this thesis, frequently met with either hushed tones or frowns. It felt like we were speaking another language. Despite previously approaching various media outlets (and even some influencers) on the matter without success, earlier this year a grassroots movement finally sprouted by savvy consumers via the power of social media.
For a while, we had actually believed that consumers just didn't care; turns out they really do, they had just been previously mislead.
The grassroots outrage gave us the courage to post our first article, long kept in the drafts, of which this one is a follow up. We also swiftly got started on a new project back in June, called ATG Greycheck® with the aim to help (and reward) consumers to identify grey beauty products (and eventually counterfeits if all goes to plan in terms of partnerships🤞 You can help by joining the waitlist).
Introduction aside, the aim of this article is to educate, inform and document. Over the past few months, we had observed consumers keeping the pressure on these retailers--bravo! However, scarcely connecting all the dots. That's what we're here for. As a disclaimer, all claims made herein are alleged or substantiated with photographic proof. Further, we hope this article reinforces our tireless commitment in adding value and trustworthiness to the South African beauty industry.
What happened since?
In May/June, consumers became suspicious with regard to their purchases of Sol de Janeiro products, specifically from Dischem (the social media posts are public domain and can be searched). While the Sol de Janeiro 'thing' wasn't actually the end of the world on the scale of critical world problems, it took flame. Even though it could very well have been less serious (see section: harmful vs neutral grey) had there been upfrontedness involved--such as a disclaimer from the start that the inventory has unknown origins or is a parallel import--there wasn't. It was this omission that spiralled, not the fact that the products were parallel imports. This, a result of a fundamental hubris built into the beauty industry, particularly in South Africa, where retailers with deep pockets go unchallenged for a myriad of reasons; among them, scarce resources for entrepreneurs to challenge the status quo.
That aside, the speculation went viral. Impressively, many consumers were right on the money and kept at the issue's heels. Allegedly, Dischem's Compliance Officer then threatened a member of the public with legal action--for speculating--by issuing a letter. However, note that Dischem never furnished any substantial proof of their claim that (proof 🔗 on homepage), Link International Brands Limited SA t/a Beauty Bag is the authorised agent or reseller, apart from lip service. While it is true that Beauty Bag was the supplier to Dischem, Takealot, Superbalist, (proof 🔗 on homepage) and more, and allegedly deceived the mentioned retailers (and media: find here a Forbes Africa placement; other media placements include lifestyle magazines advertising Beauty Bag products), consumers shouldn't give these retailers a free pass. To be clear, these companies have the resources to do due diligence proactively. In what seems like a PR puff piece by Adams & Adams, re-published verbatim on Bizcommunity, the author concluded that "Dis-Chem deserves commendation for its proactive response in removing the questionable products from its shelves and upholding the integrity of Sol de Janeiro’s brand. This decisive action highlights the importance of vigilance in safeguarding both customer trust and the reputation of global brands and sets a strong example for other retailers." Proactive? A proactive response, in our opinion, looks like a retailer who understands trademarks & IP, understands their supply chain, have the domain expertise to sniff out false information and does their due diligence before stocking shelves and making claims to customers (claims, as in claiming to stock the brand). This perfectly illustrates how retailers use legal counsel and the media to change the narratives. As a side note, we could not find any public document to confirm that there is any legal action taking place on the part of Dischem or Beauty Bag, as both Dischem and Beauty Bag claimed to be doing (proof 🔗 on homepage) (in other words, it appears that these claims were made to scare the public).
Even more brazen, in this article, the CEO for Dischem made sure to mention that the 'Sol-saga' didn't affect their revenue: "the fall-out had little impact on its sales numbers", calling the Sol de Janeiro range 'small'. For reference, Sol de Janeiro is valued at US$450 million, while Dis-chem is valued at roughly 3-4 times that. But, for a single brand's valuation to be one third/fourth relative to a multi-brand retailer, that is an extraordinary statement.
The statement designed--in our opinion--to redirect, minimise, and reframe the narrative while avoiding direct accountability. Moreover, it suggests that their customer base--that's you--is indifferent to the issue, further attempting to normalise what is fundamentally an unethical business practice. Lastly, it minimises the situation (as well as the brand equity) to a minor operational blip that have no power over their fundamental metric--revenue, instead of the gross violation of their consumer's trust and intellect.
Meanwhile, Beauty Bag continued the charade on their instagram by insisting that it's all a big misunderstanding. Then came the now infamous competition (proof 🔗 on homepage) (where is the The National Lotteries Commission?) where Beauty Bag claimed to offer a trip to New York to visit the Sol de Janeiro offices. An obvious ploy to maintain public favour, Sol de Janeiro confirmed numerous times that they have no part in the competition. What's worse? An entry was guaranteed by a purchase on Beauty Bag's website. We could not find any evidence that Beauty Bag kept their commitment to deliver the prize--if you have information, please send it to us. Shortly after, Beauty Bag's instagram got banished; from what we gather by Meta after purportedly receiving numerous reports about the alleged fraudulent competition. However, shortly after that, Beauty Bag re-appeared with a new account which was able to collect just over 41.6k followers in short succession. Most of which were, unsurprisingly, fake followers; at this point, we didn't even bother to screenshot these as the company was clearly imploding. What's more is, right after the viral speculation started on social media, the competition seemed to gather a slew of positive reviews for Beauty Bag on Hello Peter, interestingly enough after their review ratio on Hello Peter had previously been skewed towards negative reviews prior to that, even though there were only a few overall. It seems odd that the bulk of the reviews--regardless of positive sentiment--occurred after the rumours started circulating in April/May. It was, of course, catalysed by the sales gathered from the allegedly fraudulent (proof 🔗 on homepage) competition. Of the positive reviews, many are suspiciously similar with similar themes ("pleasant, fast, efficient"). We'll let you decide for yourself. Observationally, at this point it also seemed like either their social media manager, graphic designer or marketing company had left them: the tone and visuals of the new instagram page was completely different than before. Insisting that everything is above board, the competition continued. And, allegedly continued to bring in cash for Beauty Bag via sales-entry while they simply moved on to their next target: Checker's Medirite (proof 🔗 on homepage). As a quick interlude, it might sound like The Beauty Bag is the only rogue beauty supplier that South Africa has ever experienced. Without a doubt, they are the most audacious, but there are a slew of others we did not mention as these seem pretty harmless while no one has ever made such a blatant legal mess. We do however monitor all grey activity.
Keeping pressure on Sol de Janeiro, the brand confirmed that they are taking action behind the scenes, which led to a dramatic end for Beauty Bag, who claimed to have been "sold to a Los Angeles based company". No evidence was found to this end. Their website is now defunct while their stock sits on Medirite's racks (proof 🔗 on homepage). It should be noted that despite retailers claiming to "take action", Beauty Bag is still theoretically operational on Takelot (proof 🔗 on homepage); one lonely product remains as vestige of a now bygone "era". What's more is, Beauty Bag has a seller score of 3.9 while there are NO disclaimers on Takealot about the product that remains. Due diligence and so forth...
Beauty Bag, it seems, had flown too close to the Sol. And that was that for them.
Medirite, a company under Shoprite Holdings with a Market Cap of ZAR177,70 billion--in other words having no excuse--made a big splash by throwing a launch party (proof 🔗 on homepage) for their new brands: Sol de Janeiro, Drunk Elephant, Colour WOW and more. A sparse selection of only 3 to 5 items of each brand decorated the purple-lit party tables. The phrase "official launch of #ontrendwithmedirite" masterfully thrown in to distract consumers (read about the semantics and linguistics of the grey- and counterfeit industry on our homepage--link update pending). There were no legal disclaimers (proof 🔗 on homepage) or acknowledgment that these products were parallel imports during the buildup or launch, which Medirite recently rectified (proof 🔗 on homepage), purportedly after consumers expressed their new-found suspicions. Again, we'd like to emphasise that we are not suggesting that the goods are outrightly counterfeit (we have full classifications later in this article), though the origins cannot be confirmed; the turn of phrase 'grey- and counterfeit' is used for completeness.
Meanwhile, Dischem released a statement claiming to be in talks with Sol de Janeiro. Today (27 November 2024), Sol de Janeiro launched in South Africa. Dischem and Medirite was not on the list of partners.
(Read our Game Theory analysis on our home page)
TLDR: What it boils down to
The Hidden Cost of Grey and Counterfeit Goods: As consumers, we often take pride in our ability to make informed choices, trusting that the products we purchase are legitimate, safe, and worthy of the hard-earned money we’ve spent. We use marketing claims, social proof and authority signals (such as credentials of employees, decades of experience, stock exchange listings etc.) to determine worthiness or value. Retailers and brands rely heavily on consumers not prodding too much at any of these signals. However, when we stop exercising our consumer rights with questions (contrast to speculation) steered at the right channels or when we support the market for (harmful) grey- and counterfeit goods, we risk not only our own satisfaction but the integrity of the entire retail ecosystem. And it really shouldn't be on (y)our shoulders as a consumer. Retailers and suppliers who deal in unauthorised or counterfeit products without the proper disclosures insult our intelligence by manipulating our trust with misleading promises, empty jargon, and complex lies. They also often hide behind our inability to get hold of them in a meaningful way. They pounce on our desire for a good deal or the illusion of luxury and access, while undermining the very standards that make our choices meaningful.
By turning a blind eye to these practices, we unwittingly fuel a culture of misinformation and deceit. Each grey- or counterfeit purchase chips away at our collective confidence in the marketplace. Every time an influencer, content creator or publisher in the beauty space neglects to inform us that the business they're advertising is a reseller, we degrade the entire ecosystem. These goods don’t just fail to live up to expectations—they sow confusion, generating rumours that spiral into myths about product quality and value. What’s worse, these rumours can tarnish the reputation of legitimate brands, eroding consumer trust and distorting market dynamics. As stories of grey- and counterfeit goods spread, they create a haze of uncertainty that leaves everyone questioning the authenticity of what they buy, from high-end electronics to fashion accessories.
At its core, supporting this market fosters a "market for lemons", where only the lowest-quality goods thrive. And if you are or have hopes to be a KOL, a content creator, influencer, or a brand owner, it systematically chips away at your most powerful currency: trust and credibility. In such a market, consumers are trapped in a cycle of doubt, forced to gamble with each purchase, unsure if the product they receive will meet basic expectations. Eventually, this market spirals downward, with fewer reputable sellers willing to engage and a broader erosion of trust that affects everyone—good retailers, manufacturers, content creators and consumers alike. The knock-on effect is felt across industries, as companies are forced to reduce prices or cut corners to compete with the flood of either cheap, counterfeit alternatives or fast grey goods squished into someone's suitcase.
This isn’t just an issue of bad business practices—it’s about the future of our consumer culture. When we allow the grey and counterfeit goods market to flourish, we risk creating a world where authenticity, quality, and ethical business are no longer valued. Instead, we perpetuate a system where the loudest or most audacious bidder wins, regardless of substance or integrity, and where consumers become passive participants in a marketplace filled with subpar, sometimes dangerous, products and services. And it trickles all the way down the those who can least afford it.
We deserve better than this. We deserve a marketplace that values transparency, quality, and respect for the consumer. Let’s not settle for the illusion of a bargain or 'access' when, in reality, the 'cost' is far higher. By choosing not to support grey- and counterfeit goods, we can help restore integrity to the marketplace, ensure our hard-earned money goes toward products that meet our expectations, and preserve the trust that makes us informed, confident consumers. In the end, it’s not just about avoiding a bad purchase—it’s about protecting the very standards that make our consumer experience meaningful. If you take nothing away from this article, let this stew: There is a big difference between rectifying a faux pas--which happens to everyone--and lip service after being caught.
Join ATG Greycheck® waitlist.
Longer read section starts here.
The Spectrum of Non-Authorised Trade: Definitions
Counterfeits: The clear danger with real risks. Counterfeits are defined as products that are manufactured to appear like another product. These products can come in 'correct' packaging albeit with altered formulations or it can come in copied packaging with tell-tale signs such as skew printing, inconsistent fonts, colours that slightly diverge from the original packaging and so forth. There are not many ways that a consumer can tell at this time. If you'd like to support our attempt to fix this, join our waitlist on https://greycheck.app/
Grey Goods: Synonyms include Diverted Supply, Diversion and Parallel Imports. These are theoretically authentic goods imported or exported to another region to benefit from either distribution- or price discrepancies between regions. It often exists where demand is higher than supply or market forces push prices up in one region relative to another (mostly in tech), hence arbitrageurs take advantage of this. While authentic by definition, the chain of custody cannot be proven or traced by a consumer (brands usually have technology to trace the chain). Therefore, buying from resellers puts asymmetric risk onto the consumer as there is no way to prove tampering, age or origin upon purchase. Warranties are by definition not honoured. Consumers are generally protected by consumer laws, however, resellers frequently fail to meet their legal obligation of disclosing goods as diverted.
The Complex World of Grey Markets
The beauty industry faces complex challenges with grey market activities, which represent unauthorised or semi-authorised product distribution channels that operate outside standard commercial frameworks. Complicated further by the fact beauty products are the result of chemistry (some of which can serve to confuse matters even more e.g. smells are subjective, formulations can break down in heat etc.); contrast to hardware counterfeits or bootleg software having objective attributes. Broadly speaking, beyond counterfeits, we can categorise grey markets into two distinct groups: Harmful and Neutral.
Harmful Grey Market Activity is generally underscored by either deliberate or accidental deceit. While grey markets generally spurt out of unmet consumer demand or arbitrage and can therefore add value, stocking or advertising parallel imports with the intention to mislead consumers into purchasing something under false pretences or using language to imply that there is a relationship between the stockist and the brand is a big no-no, therefore categorised as harmful. Our complete explanation of why it is harmful can be found under our Game Theory analysis (🔗 on homepage) of grey markets. The reader can assume that any criticism taken in this article or others, refers to this category of grey goods. The harmful nature is legally underpinned by South African Consumer Law while prior case law substantiates this claim and is therefore not a personal opinion.
Neutral Grey Market Activities: Oftentimes, there might be a product you wish to obtain that isn't distributed in your region. Perhaps you miss your favourite perfume from Paris or that game-changing serum from South Korea? We don't see any real harm in platforms that fill this gap with clear disclosures of their business model. In fact, we've been asked many times to about finding products. Not being able to find it in your region, can be due to a myriad of factors such as regulation, the expense for a business to import it or even that there might not be viable/sustainable demand for that product in the region to justify distributing it. A business model that obtains products in another region to resell without the permission of the trademark owners isn't inherently "bad"--in fact, it has been the source of huge debates in which scholars cannot agree on its position--and is classified as neutral. However, it is only neutral in the circumstance that: 1) it meets SARS' (or similar) import and tax regulations, 2) places conspicuous and repeated notification to customers about origin per law and 3) can prove chain of custody. These neutral situations include: personal shopping services; direct imports with full disclosure to resell; or legitimate parallel imports (thus not expired, modified products or products from unknown origin) with disclosures to the buyer. Unfortunately, in South Africa, most businesses in the beauty industry never legally disclose. Instead, they rely on semantics and consumer goodwill.
We need a hero: Role and responsibility of media and content creators
The CompCon, the CPA, ARB, the media and 'opinion leaders' failed you. In the past decade, social media and e-commerce have taken the world by storm. This has led to a new contemporary shopping-, media- and information landscape that has significantly shifted power. But with that, it has shifted how information is shared or verified. The speed and dynamics has led to poor fact-checking, lower barriers or credentials, coupled with a surge in members of the public becoming influential via mediums such as instagram or Tiktok.
Where a decade ago, people "accidentally" or "naturally" became influential as a result of sharing their personal lives or unique perspectives (that is, first gaining an audience then brand affiliations), content creators now seek affiliation first to lend credibility to their own platforms--the complete reverse. With that, content creators have framed their work as neutral communication channels (to maximise the number of partnerships available). Which is their prerogative. We are by definition content creators too. In fact, the phrase "content creator" replacing the original word, "influencer", underscores the shift from opinion leader (which risks alienating potential partners) to neutral advertiser. Unfortunately, content creators have repeatedly lent credibility to some of these businesses through affiliation with their personal brands. And they still do. The beauty industry isn't the only vertical this happens in. Crypto, diamonds, gambling, fast fashion, and travel schemes have all seen the hallowed halls of influencer marketing. To be clear, it is very difficult for these creators to verify business legitimacy, particularly if they are being mislead. Theoretically, that's where domain expertise would play a big role. The media, similarly, see their role as relaying information or appeasing advertisers; seldom paid for their opinion. Influencers and media creators are unfortunately not neutral relayers, but active participants in a market trust ecosystem.
Their platform comes with an implicit social contract: the power to shape audience perceptions. Wilful ignorance is not neutrality either. By lending their platforms and audience trust to a business, they become de facto co-architects of that business's market perception.
As for our regulatory boards? MIA seems to be a more befitting acronym for these.
*If you'd like to support our attempt to bring transparency to the beauty industry, join our waitlist on https://greycheck.app/
The (Drunk) Elephant in the room
In an ironic and timely twist, perfectly underscoring why grey market goods (or parallel imports) can pose various unforseen risk, Drunk Elephant recently recalled a handful of products (proof 🔗 on homepage) For consumers who bought through legitimate channels, the process is straightforward: Check the list of retailers and follow the instructions. The onus to check the Drunk Elephant products bought in South Africa falls entirely on the consumer. We personally went to Medirite to check lot numbers, however, checking every product became too time consuming.
Consumers now risk using a recalled product in South Africa, as we are not part of the official chains of communication. This further illustrates the risk to retailers: Have Medirite and other resellers issued statements and refunds?
For at least two to three years now, numerous South African retailers have claimed to "stock" Shiseido-owned Drunk Elephant, "officially" (implied also by lack of disclosures). These retailers include Superbalist (proof 🔗 on homepage), Beauty Bag (proof 🔗 on homepage), Clicks--removed (proof 🔗 on homepage), and Medirite (proof 🔗 on homepage). There are a bunch of other websites in South Africa where you can shop Drunk Elephant, however, we have generally classified these other resellers as 'Neutral Grey'. In the case of recalls, the category shifts to an urgent 'Harmful Grey'--it clearly poses a risk to unwitting consumers who are unlikely to receive proper communication from resellers.
This isn't South Africa's first Rodeo: An Ordinary day
For years, South Africans have been purchasing brands like The Ordinary, among others, via Takealot or Weareegg (proof 🔗 on homepage) prior to its launch in South Africa. When The Ordinary finally landed on our shores through Estée Lauder Co., there was some initial confusion as the penny dropped for some consumers that what they previously bought might not have been the real deal. Today, South Africans have no way to tell whether The Ordinary they buy on marketplaces online is from the official batch or the diverted batch. Many consumers seemed bewildered to find out that the brand has never officially been available in South Africa, as it was never made clear to them. Confusion is a feature the industry relies on, not an anomaly.
But it wasn't and isn't just The Ordinary. Marketplaces and retailers have been misleading consumers (either via incompetence or deliberate omission of proper disclosure--we don't know which one is worse) for years. Kylie Skin was available at Weareegg. Sephora branded (proof 🔗 on homepage) goods too. Summer Fridays used to be available here too, up until their Jet Lag recall. Marketplaces and retailers rarely disclosed 'parallel imports' before the CompCon and Carte Blanche put pressure on them. Again, we emphasise the distinction between counterfeits, neutral grey and harmful grey. The point is, this has been happening for years: you've been misled for years. It gets swept under the rug and minimised. At what point do we hand the baton to retailers, e-tailers and entrepreneurs committed to domain & product expertise, trustworthiness, and adding value through diligent information?
Not just South Africa.
At this point you might be wondering whether it's just South Africa where this happens in the beauty industry. Concisely: no, it's not just South Africa. And it's not just the beauty industry either. There are heaps of information of the same problems in other geographies, particularly where a few players or marketplaces dominate the commerce narrative, however, it risks making this article too long. Just know that this happens globally. However, certain markets like South Africa are hotbeds for grey markets and certainly more brazen.
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Industry Perspective
To read our industry perspective through a Game Theory lens (it's super cool!), 🔗 on homepage.
The Retailer's Grey Market Dilemma: Navigating Ethical and Economic Challenges
The beauty and retail industries face a complex challenge that strikes at the heart of modern commerce: how to distribute effectively/competitively while dealing with the persistent existence of grey markets, or rather suppliers diverting their stock. Grey products, which circulate through unauthorised but not necessarily illegal channels, represent a nuanced economic phenomenon that challenges traditional distribution models.
Retailers encounter intense economic pressures that make grey market goods increasingly tempting. The global marketplace creates significant price or distribution disparities, offering seemingly attractive opportunities for businesses seeking to reduce costs (or MOQ obligations), reduce obligations and maintain a competitive edge through differentiation. Increasing novelty and global market arbitrage create powerful incentives that can temporarily boost top-line revenue or market share, despite the long-term risks involved.
Authorised retailers, however, generally bear the brunt of these market dynamics, while grey sellers get a free ride. They find themselves caught in a challenging ecosystem where unauthorised sellers can undercut distribution and obligation, erode brand relationships, and compromise overall market integrity. The consequences extend beyond immediate financial impacts, potentially damaging carefully built consumer trust and brand positioning.
Due diligence then becomes paramount in navigating these treacherous market waters. Unfortunately, in South Africa, due diligence has shifted onto consumers. Proper sourcing is generally implied with bigger retailers, yet history has proven that apparently, even JSE-listed retailers take shortcuts. Already taxed consumers must become increasingly vigilant, watching for critical red flags such as prices substantially different to market rates, unclear product origins, and the absence of official warranty documentation. The consumer impact of grey market goods extends far beyond simple pricing or moral concerns. Product quality becomes a significant risk, with potential safety implications and compromised manufacturer warranties. In the South African context, the Consumer Protection Act provides critical safeguards, offering legal recourse and mandating disclosure requirements that help protect consumers from misleading practices. Yet, as we've seen, these retailers skirt legal obligations.
Consumers can protect themselves by adopting strategic approaches to purchasing. This involves verifying retailer claims, requesting comprehensive documentation (albeit, these can be faked), understanding product origins, and prioritizing authorised sellers. A tool in development by us, ATG Greycheck® also aims to help. Retailers, meanwhile, must focus on developing transparent supply chains, cultivating authorised distributor relationships, and prioritizing long-term market reputation over short-term gains. Unfortunately, as long as the media and influencers endorse so-called 'defecting' (see Game Theory 🔗 on homepage) retailers, consumers and other business will bear the brunt.
The role of suppliers cannot be emphasised enough either. In general, South African retailers rely on a handful of established (and sometimes new) suppliers. These include P&G, L'Oreal, Estée Lauder Co., PCG and ASCO, among others. As is illustrated in more detail in our Game Theory other article, suppliers often unintentionally (or intentionally?) lend credibility to previously 'defecting' retailers by including them in contracts to stock new arrivals on the market. This not only confuses consumers but ensures that retailers never bear any consequences. It's also frustrating for other players in the industry.
The path forward requires collaborative industry solutions. Enhanced authentication technologies, industry-wide transparency initiatives, and comprehensive consumer education programs can help address the systemic challenges posed by grey market goods. Technology and collective effort can create more robust, trustworthy market ecosystems. However, 'defectors' should be excluded in 'clean up' actions as a consequence. Game Theory suggests that scenarios where participants are penalized for consistent betrayal (and rewarded for cooperation), tend to produce more stable and mutually beneficial outcomes. The more we have suppliers willing to concede to 'defectors', the more opportunity there is to profit off of consumer confusion. Perhaps we're simply a country of poor strategists.
Ultimately, the grey market represents a complex challenge that demands a nuanced approach. Success will come to those who can balance economic pragmatism with ethical sourcing and an unwavering commitment to consumer protection. By empowering consumers and encouraging responsible retail practices, we can work towards a more transparent, trustworthy marketplace that serves the interests of all stakeholders.
The future of retail lies in creating value through integrity, transparency, and genuine consumer care.
Quick-fire notes:
Long-term consequences for the market: negative.
Proper sourcing can be tested by both parties (both brand and retailer) publicly confirming authenticity of goods; not just one party.
Red flags consumers should watch for: semantics, prices high above dollar equivalent, marketplaces, damaged packaging.
Consumers have the right to ask any and all questions to a retailer about the origin of their goods.
After effects: everyone is a suspect.
International brands entering South Africa should partner with a consultant and say NO to retailers who have previously misled their consumers and hurt their brand reputation.
Suppliers should exclude unethical retailers in new brand launches.
Consumer Impact: Market systematically degrades; Loss of local retail infrastructure; Wasting money on deception.
Consumer Rights and Protections can be found here; do not let retailers threaten you for exercising your rights.
Unfortunately, there is no documentation consumers can ask for that proves origin of goods (because these can be faked). The closest thing are SARS import documents and blockchain protected press releases from the brand themselves.
Got questions? Ask us anytime!
For Consumers
How do you verify legitimate retailers? Has this changed your perception of retailers? If you choose to purchase a parallel import, how can you verify its attributes such as age, chain of custody and price? While for tech, we have ICASA that oversees regulation as well as verification, what do we have for beauty? If you'd like to see such a tool, join our waitlist.
As mentioned at the beginning, our aim with this article is to connect dots and to educate. All information posted is public; we have taken the time to synthesize it. We are available to any retailer who is serious about strengthening their due diligence or strengthening their market position with technology-led transparency or sourcing. Contact us at [email protected]. If you feel this article is unnecessary or misplaced, ask yourself who else is putting in the effort?
Post scriptum: Honourable mentions
We thought it would be interesting to showcase two cases where brands have done mini-campaigns about unauthorised retail in the bud: lelive and Fieldbar.
Further exploring:
Carte Blanche
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