Counterfeiters aren’t just bad news for your business; they can also be downright dangerous for your customers’ well-being and safety. When it comes to the counterfeiting and pirating of commercial goods, the economic impact, legal implications, and health and safety risks are growing on a global scale.
For example, Amazon.com has drawn continued criticism for failing to get tough on counterfeit goods on its platform. A rampant stream of Chinese counterfeit goods has also exacerbated trade tensions between the U.S. and China, which recently signed a new trade agreement that commits to cracking down on pirated items. As part of this agreement, China has promised to revoke the operating licenses of e-commerce platforms that fail to stop the sale of counterfeit goods. But will those measures be enough?
New software tools combine the capabilities of certificate authorities, a proven security mechanism protecting website domains, browsers, and electronic signatures, with two-dimensional barcodes (QR codes) to provide an effective and inexpensive solution. Companies can leverage such tools to enroll and provide the proprietary information necessary within a certified QR code to prove products are legitimate before they’re even purchased by retailers and consumers. This technology-enabled, cost-effective approach helps build trust with your own suppliers and customers, ensuring that every item that changes hands is genuine.
For businesses, inadvertently purchasing counterfeit goods or having your own products ripped off can compromise brand reputation, customer relationships, and overall competitiveness. Here’s what you need to know about the risks of counterfeit products — and how to face them head-on.
The Real Dangers of Counterfeit Goods
It’s estimated that roughly $1 trillion in commercial value was lost to counterfeit and pirated goods as of just five years ago — and that problem could triple by 2022. Between 2018 and 2019 alone, counterfeit activity rose a dramatic 40 percent. According to the Organisation for Economic Co-operation and Development (OECD), counterfeit trade creates profits for organized crime gangs at the expense of companies and governments, with counterfeiters more likely to thrive where governance is poor.
The OECD also reported 24 percent of U.S. brands or patents were affected by counterfeiting in 2016 alone. This indicates a legitimate threat to overall consumer and business health in multiple ways. From an economic lens, counterfeit products siphon off sales of legitimate goods, creating lost revenue opportunities for companies. Counterfeit products are also quite often low quality and can cause injuries, especially in the personal care or pharmaceutical industries.
The authentication of goods is necessary. Virtually everyone that makes, transports, buys or inspects goods is in question for authentication capabilities. Be sure the items you’re processing, selling or purchasing are what they claim to be. Eliminate counterfeiting on a global basis and enable consumers to be confident that they’re buying a genuine and legitimate product.
Steve Maul is the chief revenue officer for LocatorX. LocatorX technology enables brands and consumers to access an item’s current location and audit trail from its origin, protecting against theft, counterfeiting, and product diversion while increasing consumer engagement with manufacturers.
Steve Maul is the Chief Revenue Officer for LocatorX. LocatorX technology enables brands and consumers to access an item’s current location and audit trail from its origin, protecting against theft, counterfeiting, and product diversion while increasing consumer engagement with manufacturers.