E-commerce SMEs are facing growing challenges from fraud, brand piracy, and cyberattacks. To effectively detect threats and strengthen long-term security in the industry, a multi-faceted approach is needed—combining legal reforms, technical safeguards, and targeted awareness efforts. Based on the study’s findings, the following key recommendations have been identified:

Protective measures

• Conduct regular security checks
• Provide specialized training programs for employees

Policy Recommendations

• Establish a centralized support hub offering guidance and resources for businesses
• Enforce stricter regulations against counterfeiting and product piracy
• Enhance international cooperation on cybersecurity and fraud prevention
• Launch campaigns to boost the visibility of trusted e-commerce providers

Technical solutions

• Monitor domain registrations to detect fraudulent websites early
• Implement watermarks on product images to prevent misuse

A company's own website is a central communication channel for e-commerce businesses—yet it also represents a potential vulnerability to cyberattacks. Fraudsters steal information from websites to create fake shops and offer counterfeit brands and products. Therefore, SMEs should regularly monitor their online presence. 14% of SMEs in e-commerce report never checking their websites, while 30% do so only once a month or even less frequently. This lack of oversight makes them more vulnerable to security threats.

Another issue is that affected companies rarely disclose when they have fallen victim to fraud. As a result, certain fraud schemes remain largely unknown. Revenue losses caused by fake shops or counterfeit products typically accumulate over a longer period, making the financial damage less immediately noticeable and attracting less public attention. In contrast, ransomware attacks and CEO fraud receive significantly more public attention. These incidents often lead to large, one-time financial losses, which makes them more likely to be reported in the media.

Recommendations for SMEs and Policy Demands

Based on the study's findings, targeted recommendations have been developed for SMEs. These include a strong call to consistently utilize legal instruments to effectively enforce intellectual property rights. Additionally, it is recommended that greater investment be made in training programs and awareness campaigns to enhance understanding of existing risks and implement appropriate protective measures.

1. Diversification of Sales Channels: SMEs should leverage a diverse range of sales channels. This not only expands their reach but also minimizes the risk of financial losses caused by fraudulent actors. Combining online and offline channels enhances resilience against potential threats and ensures greater stability in business operations.
2. Proactive Measures Against Threats: SMEs should develop targeted preventive strategies to detect and combat threats at an early stage. Key actions include:
   • Monitoring online marketplaces to quickly identify fraudulent activities.
   • Training employees to better recognize counterfeits and fraud attempts.
   • Collaborating with legal and technology experts to maximize legal protections and optimize security measures.
   • Conducting regular security audits and implementing effective protective measures to sustainably reduce the risk of fraud and cyberattacks.
3. Customer Education and Transparency: Open and clear communication about the risks of counterfeits and the characteristics of genuine products is essential. This helps build customer trust and encourages them to buy from reputable sellers. Targeted information campaigns and clear product labeling can raise awareness of fraud risks and better protect consumers from deception.

SMEs in e-commerce often underestimate fraud risks such as fake stores and product piracy. Despite rising online crime, risk perception remains low—even though 22% of businesses have already been affected. The study highlights that SMEs must continuously refine their defense strategies. Effective fraud prevention requires both technological solutions—such as AI-based fraud detection—and proactive protective measures.

How exposed are SMEs in e-commerce?

Cybercrime is on the rise, and Austrian SMEs in e-commerce are increasingly affected. A striking 22% of surveyed companies have already encountered threats such as fake stores, counterfeit brands, and product piracy. Despite this, the perceived risk remains low, even as cybercrime continues to increase. The actual threat level is significantly higher than many SMEs realize, creating a dangerous gap between risk and awareness. 

How Do SMEs Currently Protect Themselves?

One of the biggest challenges is low awareness of fraud risks within the industry. However, businesses that have taken preventive action recognize the value of strong anti-fraud measures. This highlights the importance of SMEs in e-commerce proactively implementing protective measures, such as clear customer communication, regular market monitoring, and legal action against fraud. Additionally, the support provided by the Chamber of Commerce (WKO) thanks to its specific advisory services is also considered very helpful by entrepreneurs.

How Do Affected Companies Perceive the Effectiveness of These Measures?

Companies that have already implemented measures against brand and product piracy rate their effectiveness particularly high. Overall, the study emphasizes that SMEs must remain adaptable and vigilant in the dynamic e-commerce environment. Strengthening protective measures and developing robust security strategies are essential for long-term success.

What is the current situation of Austrian SMEs in the area of e-commerce? 

Almost one in three Austrian retail companies (29%) sell products online. The majority of these companies (83%) use their own online shops for this purpose, while more than half of them still have a bricks-and-mortar shop. In addition to their own website, online marketplaces, social networks and click & collect services are other important sales channels.

How are SMEs organising their marketing strategies in the digital environment?

The effective use of digital marketing strategies is crucial for SMEs in e-commerce. Almost all companies surveyed (98%) have their own website. Social media platforms such as Facebook and Instagram are also widely used, with usage rates of 60% and 53% respectively. Six out of ten retailers use search engine advertising to promote their products. Six out of ten retailers use search engine advertising to promote their products.

What challenges do SMEs face in their e-commerce activities?

The challenges of e-commerce are many and varied, mainly related to marketing budget and targeting. Around half of companies complain about budget constraints that make it difficult to achieve the desired results. Similarly, 49% of companies report difficulties in targeting specific audiences.

What risks do SMEs see in online retailing?

Fake shops, counterfeit brands and product piracy are significant risks for SMEs in e-commerce, which can lead not only to financial losses but also to a loss of trust and reputation. Intellectual property infringements often lead to high legal costs and loss of exclusivity, which further exacerbate the situation.

What can be done to mitigate these risks?

A combination of stronger regulation, best security practices and risk education is needed to mitigate these risks. Working with trusted platforms and service providers is also essential to ensure the integrity of online commerce and build consumer confidence.

1 in 4 Austrian SMEs active in e-commerce have experienced fraud, e.g. through fake shops, brand counterfeiting, product piracy or intellectual property infringement. These threats are particularly critical as SMEs often have limited resources and are therefore more susceptible to the negative effects of such activities. In addition to financial losses, these incidents can also affect customer confidence in online commerce.

For this reason, KMU Forschung Austria, together with the Austrian Institute for Applied Telecommunications, has conducted the study of unreported cases Stop Fraud - Threats to Austrian e-commerce. The study, which will be published in full at the end of February, provides a comprehensive overview of the various threats to SMEs in e-commerce. 

For online retailers it is increasingly difficult to persist in today’s market conditions. The dominance of big players and a lack of customer trust are inconveniences, however, the activities of fraudulent players put additional pressure on retailers. By using the same marketing tools as reputable e-commerce companies like advertising on social media and in search engines, criminal actors are suppressing the visibility of legitimate actors on online platforms. The strategic ACR project StopFraud aims to combat these fraudulent players in e-commerce, to strengthen small and medium businesses in Austria. More information: https://research.oiat.at/stopfraud 

How was the study conducted?

The data was collected through an online survey, with the population defined as all companies in the Austrian retail sector. Respondents represented a wide range of company sizes: One-person enterprises (1PEs) (27%), two to nine employees (51%), ten to 49 employees (18%) and more than 50 employees (5%). 

What does this mean for SMEs in E-commerce?

The results of the survey highlight that protection against online fraud and counterfeiting is key to ensuring the integrity and security of e-commerce. SMEs need to invest in protective measures and maintain a high level of vigilance.