In 2018 according to some estimates, around 4.6 million bottles of Spanish rosé wine made their way into French cafes, hotels, and restaurants disguised as original French rosé wine. The law enforcement agencies and wine industry officials could not do much as the two wine types could not be told apart in packaging and taste. The suspected counterfeiting in the French wine industry was particularly upsetting for wine growers who were looking on helplessly as their income dropped.
Such illicit activities are not peculiar to just the winery industry; similarly, you can get an exact replica of iPhone in the streets of Shenzhen for $50 a unit. It is equally common to see first-copies of Versace and Supreme selling on alleyways of major cities. Currency has been counterfeited for as long civilizations exist; it was common for criminals to sell gold-plated alloys as gold to unwary buyers.
The democratization of the internet and computing made piracy so rampant in the digital goods industry that record labels, software publishers and movie distributors started to lose more money than they could make.
However, the digital goods industry came together and solved the problem once and for all. If technology can work against them, it certainly can also in their favor. The anti-counterfeit technology they employed changed the way digital goods are distributed and inspired more industries to follow suit.
The Parallel Economy of Counterfeit Products
It is common for luxury items to leave a counterfeit industry behind—a parallel economy that caters to those cannot afford them because of the comparatively higher price points. It is natural for a person living on a minimum wage in Shenzhen to visit an underground market rather than the nearest Apple Store to buy the latest iPhone.
Major brands appear not to mind these “cute” attempts of flattery. They lead to free marketing and the assumption is that the person will buy an actual iPhone when they can eventually afford one. But for small creators, marquee brands, Haute couture houses, boutique manufacturers, these attempts have the potential to put them out of business. A considerable amount of effort is spent in inventing distinctive designs and in establishing a trademark while copying takes only a fraction. There is no escaping from someone copying your products and taking your profits. Enforcement agencies treat counterfeiting of luxury goods as a “soft” crime, so good luck putting them behind bars.
The Art of Counterfeiting and the Future of Anti-counterfeiting
For the most part, it does not take long to copy a product and mass-produce it if you know the right persons to talk to. A subcontractor will willingly hand over the design secret for a little favour. The technology it takes to design and manufacture goods has become so sophisticated that even experts have a hard time telling a copy from original; and interestingly enough, enforcement agencies are not being of much help; neither the confiscation of counterfeit good nor the apprehension of the counterfeiters is working.
It seems like the physical goods industry would have to put in a fight itself like digital industry did a long time ago – technology will indeed play a big role in this fight. The anti-counterfeit initiative will require the cooperation of various stakeholders who will benefit from the crackdown.
Building Anti-counterfeit Technology
Counterfeits selling as originals does not benefit anyone but the perpetrator. Considering that counterfeit products are inferior in quality and less likely to last, it does affect consumers’ trust in your brand, retailers will experience increased numbers of buyers returning their purchases, distributors will see higher stockpiles, and the brand will lose revenue.
Together these stakeholders can work on a common technology to keep counterfeiters out. If a product is scanned every time it changes hands between the stakeholders, it will become difficult for the counterfeiter to mix his or her products with the originals and get away with it. Even if this is done, a conscious consumer can always scan a product with a mobile app to check its authenticity before buying.
The State of Anti-counterfeiting Technology and What the Future Holds
Unfortunately, counterfeiting and a parallel illegal economy are here to stay and grow over the coming years. Brands must futureproof their products to protect themselves from losing revenue, reputation, and customers.
The best anti-counterfeit solutions providers, like Cypheme, will have a pivotal role to play in this fight by giving companies a technological advantage with innovative AI-backed anti-counterfeit solutions; this is not just for high-value products, but low-value consumer goods as well.
Smart Anti-counterfeiting Technologies
Anti-counterfeit solution providers, like Cypheme, are helping retailers and brands in various industries fight back. The AI solution from Cypheme is applicable across industries such as pharmaceuticals, wineries, fashion, cosmetics, and many more. This AI-powered anti-counterfeit solution makes use of advanced sets of algorithms and neural networks to help stakeholders verify a product’s authenticity easily, simply through the use of the camera of their smartphones.
Cypheme’s method has every product being labelled with a unique fingerprint label which is tamper-proof and hold traceable identities of the products they are fixed on – these labels hold information on the complete journey of the product from manufacturing to the shelf, while offering complete supply-chain veracity and visibility.
When a user scans these AI powered fingerprint labels through their smartphone’s camera, the entire product data is pulled up on the user’s phone within seconds, to either verify or disapprove of the product’s authenticity.
Beyond helping brands uphold the integrity of their products, customer’s are also assured of the authenticity of the product they are purchasing, and indirectly become anti-counterfeiting crusaders by reporting instances of fake products claiming to be from their preferred brands.