Padmakumar Nair is the co-founder and CEO of Ennoventure. An alumnus of the MIT Sloan School of Management, he brings with him over 18 years of leadership experience across the globe in devising strategies that bring companies to success. He has managed multi-disciplinary, cross-functional and geographically diverse teams to optimise business value by following a motivational style of leadership and encouraging open communication.
Counterfeiting has long been a problem that markets and governments have had to contend with. During the pandemic and the ensuing chaos, the counterfeit market boomed like never before. Recent incidents have demonstrated the gaps in the anti-counterfeit infrastructure, particularly when it comes to online shopping, and both brands and governments have a big role to play in fixing those gaps. Let’s take a closer look at how this can happen.
The rise in counterfeit goods during the pandemic
Covid-19 sparked chaos across the economy, in terms of both a general sense of uncertainty about the future and a complete overhaul in the way business and transactions worked. Taking advantage of the general panic and the desperate search for medicine and safety items, many counterfeit businesses sprung up. Covid-19 safety products like face masks, gloves and hand sanitisers have seen a tremendous spike in demand, and the shortage in supply enabled the proliferation of fake products. Particularly during the second wave, while some scammers sold fire extinguishers as oxygen cylinders, others took money promising prompt delivery of oxygen cylinders that never arrived. As a result, this contributed to genuine brands facing legal repercussions.
Ecommerce and counterfeiting
Ecommerce has been on the rise over the last decade, and Covid-19 has accelerated this. According to recent estimates, online shopping went up by 74% after March 2020, and 66% of customers plan to avoid physical crowds for the foreseeable future. This, combined with the fact that the average time spent on smartphones has gone up to a daily 3 hours and 40 minutes, means that ecommerce will be the buying platform of choice in the years to come.
Ecommerce via online marketplaces has its own counterfeiting risks, with fake products doing a raging business. Many scammers use high-resolution photos to fool customers, and even steal the actual branding logos and affix it on their pages. With clever photography, product defects and cheap material can be concealed, which means people will buy the products without demur. As more counterfeit vendors flourish, ecommerce marketplaces end up getting undeserved reputation as promoting fake goods, even though it is the vendors that are evading quality checks.
A big part of why the counterfeit market continues to thrive is customer indifference. For many daily-use items such as bags, clothes or even masks, customers are fine with accepting brand lookalikes if it means they can save money. The knockoff designer market, in fact, has been thriving in less developed countries for this reason – people are willing to buy whatever is cheapest. There is also a good deal of ignorance at play, as many customers can be fooled by packaging and branding that looks more or less like the original. Where this is dangerous is in the case of consumables like food or medicine, which when adulterated can cause illnesses or even death. Even knockoff clothes made from cheap materials that do not meet safety standards can potentially harm the wearer by causing skin problems.
How brands can adopt anti-counterfeit measures
One of the key anti-counterfeit measures that brands should commit to is in upgrading their packaging. Traditional holograms are easy to fake and expensive to replace. Instead, invisible cryptography signatures as offered by modern anti-counterfeit solutions can be integrated into the packaging and scanned by the end customer for authentication.
Ecommerce marketplaces can adopt various best practices such as stringent verification of their third-party sellers. This will keep customers safe from fakes and also protect the reputation of genuine brands. There are also dedicated platforms that can automatically match vendor information from multiple marketplaces to connect the dots on fraudulent activity.
Finally, brands can play a big role in educating customers about what genuine products look like and how to avoid fakes. The stronger the brand’s online and offline presence, the more customers will be aware of the brand and its products, and the less likely they will be to mistake a fake for the real deal. Brands can share curated resources on what to look for in a genuine product as well as a contact number to reach out to in case someone spots a fake. If the brand demonstrates its commitment to anti-counterfeit measures, customers will do their part too.
Overall, it is important to remember that counterfeiters are constantly upgrading their tricks and using the same protection measures over and over again will not work. In addition to the latest technology, stronger national-level infrastructure such as language inclusion to strengthen the recognition of the serious impacts of counterfeiting and piracy, and the need for stronger enforcement to stop the trade in fake goods, supported with structured policies and stringent implementation schemes. India can consider working with international organisations in places like the EU or the OECD to strengthen intellectual property rights and promote genuine goods. With concerted efforts and quick adoption of the latest technology, the counterfeiting problem can be curbed once and for all.