Legitimate beauty businesses are facing competition from an illicit market estimated to be worth R2.3 billion a year.
Counterfeit cosmetics, unauthorised skincare products and other goods reach consumers through informal and online platforms.
The estimate comes from a study commissioned by the Consumer Goods Council of South Africa (CGCSA) and compiled by economic consultancy Econometrix, which examined illicit trade across 12 sectors and its impact on the economy.
The study estimates that illicit cosmetics and personal-care products account for 4.5% of the formal domestic market, valued at R50.7 billion.
It estimates that the illicit market displaces R1.5 billion in formal-sector output., and has a R593 million impact on GDP with 616 jobs associated with the displacement.
Annual tax losses are estimated at R215 million.
For small beauty retailers, salons and independent skincare businesses, the competition comes as legitimate operators carry the costs of sourcing genuine products, distribution and compliance.
Small businesses face cheaper competition
The report identifies online marketplaces, cross-border e-commerce and unauthorised import channels among the routes through which illicit products reach consumers.
Mokgadi Fafudi, head of regulatory compliance at the South African Health Products Regulatory Authority (SAHPRA), said investigations had also found illicit medicines being sold through spaza shops, social media and beauty-related businesses.
This puts legitimate beauty entrepreneurs in competition with sellers operating through channels that can offer consumers cheaper alternatives.
The distinction is that not every product sold through an informal business is illicit.
The concern is whether products are counterfeit, unauthorised, illegally imported, unregistered where registration is required or otherwise outside the regulatory framework.
Fafudi said illicit medicines enter the market through several routes, including smuggling and diversion from legitimate supply chains.
“There would be hijacking of medicines, or also there would be possibly people who are working in facilities such as hospitals who are also selling this through informal markets,” she said.
Online sellers widen the market
Social media has also made it easier for sellers to reach consumers without operating a conventional shopfront.
“People see things on social media, and they become gullible to those, and people are selling wrong information,” Fafudi said.
The problem extends beyond cosmetics into products marketed for weight loss and wellness.
Fafudi said injectable peptides are among the weight-loss products increasingly being found by investigators.
“The weight loss now being the common ones, the injectable peptides being the most common ones that we are now finding,” she said.
Legitimate businesses face another layer of competition as consumers encounter beauty, wellness and health products across the same digital and informal channels.
Enforcement targets illicit goods
Authorities have also been targeting counterfeit goods entering and circulating in the country.
In July 2025, SAPS said its National Counterfeit and Illicit Goods Unit and other agencies seized more than R156 million worth of counterfeit and illicit goods during nationwide operations. The seized goods included perfumes, cosmetics and pharmaceuticals.
The South African Revenue Service (SARS) also has a role in intercepting counterfeit and prohibited goods at the country’s borders.
Small businesses that rely on legitimate supply chains face economic impact goes beyond individual lost sales.
The CGCSA and Econometrix study estimates that illicit activity in cosmetics and personal care already displaces hundreds of millions of rand in economic activity.
Fafudi said consumers who encounter online sellers offering medicines should report them to SAHPRA.
“The moment you identify a facility which is online and is selling medicines, report it; we will investigate it,” she said.
“This is about health. Then a person is gambling with their own health.”
