As more consumers shop online, counterfeiting continues to thrive. Online marketplaces provide a setting in which product authentication is extremely difficult.
The situation leaves brand owners and consumers at risk. But that’s not to say there is nothing they can do.
E-commerce sales hit a record high in 2020. Now brands are wondering if consumers will abandon the convenience of online shopping and return to their old shopping habits. While e-commerce sales have started decelerating in some markets, the consensus among analysts is that e-commerce is here to stay.
Unfortunately, this means the counterfeiting problem will only get bigger.
Fake products have been sold online for years, but with the proliferation of online marketplaces, such as Amazon or eBay, it’s never been easier to fool consumers. How could they possibly know if the reseller is affiliated with the legitimate manufacturer?
There was a time when counterfeiting essentially affected luxury brands.
Not anymore.
Today, counterfeited products still include luxury articles, but also, increasingly, fast-moving consumer goods such as over-the-counter drugs and packaged foods. Basically, any product that is in high demand—think PPE equipment, vaccines, or specific drugs—is a viable target.
And this poses a growing risk to consumers’ health.
In 2017, the global trade in counterfeit goods was valued between $923 billion and $1.13 trillion. By 2022, ICC estimates it could reach $2.81 trillion.
Counterfeiting costs brand owners millions in lost sales. It also deprives governments and economies of tax revenues, discourages innovation through IP theft and ultimately facilitates the underground economy.
Manufacturers are as big a target as consumers, but tend to underestimate the consequences it can have on their business. Counterfeit parts that fail to meet quality and safety standards degrade quickly. These faulty parts can cause production downtime or worse injure consumers and factory workers.
Laws against counterfeiting exist in every country. Enforcing them is another story. Detecting and confiscating counterfeits is a long and complex process, making it a low-risk, high-reward crime.
Consumers are increasingly aware of the potential health and safety risks counterfeit products pose. But they’re also part of the problem when they knowingly buy fake merchandise.
Brands, especially luxury brands, have been trying to combat counterfeiting for years. LVMH has an impressive legal team and spends $17 million annually on anti-counterfeiting legal action.
But what if there was a more cost-effective way to proactively protect your brand and the health of consumers at the same time?
Graphic Security Systems Corporation (GSSC), a leader in anti-counterfeiting technology, has recently partnered with Tamperguard to design a tamper-evident security packing tape that contains all the security features of the BrandMark® icon.
The result is a unique solution that combines the benefits of using tamper-evident packing tape with those of using a smartphone to easily scan and authenticate products.
Just like the BrandMark® icon, this security tape is fully customizable with branded logos, giving recipients a proof of authenticity and the assurance that the seal remains intact until the merchandise is received. Immediately following verification of authenticity, collected data is automatically uploaded to a secure web-based backend system for monitoring and data analysis. Additionally, the system provides mapping capabilities through geo-location to view each scan down to the street level it was performed.
The rise of e-commerce and of the direct-to-consumer business model are fueling the rise of counterfeiting to new, unanticipated levels.
But it is not just counterfeiting that brand owners need to protect against.
Unauthorized access to steal, alter or contaminate products can also irreparably damage consumers’ health and your brand’s reputation. This risk is especially high when products go through many touchpoints, providing more opportunities for tampering.
Using a security tape with authentication capabilities can make all the difference. To your brand. And to your customers.
Graduate from the Chemical Engineering Department at McGill University, Jesse has been with the Tamperguard team since 2016 and has helped develop novel chemistries for the security of Tamperguard’s products. He also helps on articles for the Tamperguard website!