The challenge of counterfeit electronics & ways to counter it

Fake electronic products are easily available in different market locations and also on e-commerce. There have been numerous reports of fake electronic goods and parts seized by authorities in different parts of the world. Of late, the immense popularity of mobile phones has made them highly susceptible to counterfeiting. You can easily spot a fake versions of mobile phone accessories being sold at the pavement or small shops.

The scenario of counterfeit electronics

According to a report published by CSC, “Consumer electronics is pegged as the fastest-growing category of counterfeited goods across the world.” The report also states that, “Electronics counterfeiting is a $169 billion industry worldwide.”

Some of the most counterfeited electronic products as per the report are smartphones, computers, tablets etc. The report makes a shocking claim that an average counterfeit phone sells for $45 approximately in the $6 billion dollar market.

The problem of counterfeit electronics

The counterfeit electronics industry has also created a challenge for manufacturers and consumers in India. Besides duping the consumer of his hard-earned money, it also creates a bottleneck for the manufacturer. Many companies are not able to recover from the damage caused due to fake products – for years.

The solution for counterfeit electronics

Holostik has been catering its anti-counterfeiting solution to a large number of companies from the electronics industry. We have state-of-the-art anti-duplication, packaging and labeling solutions that ensure complete safety of your products and the supply chain.

Some of our products for the electronics industry are as follows:

Security labels

Security Holograms

Security pouches

Hot stamping foil

Holographic packaging films

Conclusion

Counterfeit electronics may be tempting for the consumer, but they can bring along a lot of problems like malfunctions, damages, poor quality of the hardware and even a deadly phone blast in your pocket or on your face. Manufacturers, on the other hand, have to face a drop down in profits and sales. Amidst this grim scenario, anti-counterfeiting solutions can play an indispensable role in the prevention of counterfeiting. To know more about our solutions call us on +91–785-785-7000 or drop us a mail at connect@holostik.com.

The growing challenge of counterfeiting in the FMCG industry

Of late, the FMCG sector has been suffering from the problem of counterfeiting. As per a report by FICCI CASCADE around 35% of FMCG items are fake. The study also reveals that around 80% of consumers believe that they are buying genuine goods.

The growth of fake goods in the FMCG sector has had an impact on both consumers and producers. While the manufacturers suffer from a tarnished brand image and low sales the consumer is at the risk of losing money and a bad impact on his or her health. He also says that unscrupulous manufacturers are also detrimental to the national economy.

Counterfeiters also repackage fake goods to make them visually similar to the genuine ones. It has been seen that old plastic water bottles are being repackaged and sold in the market, the same is the case with many other goods. Such deceptive duplication leads to a loss of consumers and brand owners as well.

In India, a large number of the population settled in rural parts of the country suffer from rampant counterfeiting of FMCG goods. With a little check of authorities and poor regulation and manufacturing guidelines counterfeiting is easily slipping in the pockets of the common man.

Advancements in technology and easy procurement of the same have made it possible for counterfeiters to establish little backyard factories and hubs for the manufacturing of duplicate items. It has also been observed that counterfeiters are making fake labels and packaging to dupe consumers. In the year 2014-2015 sale of FMCG, tobacco and alcoholic beverages constituted 65 percent of the total sales.

Holistik provides customized anti-counterfeiting, packaging and labeling solutions to deal with the problem of counterfeiting in the FMCG sector. To know more about our unique anti-counterfeiting solutions call us on +91–785-785-7000 or mail us at connect@holostik.com.

The impact of counterfeiting on the common man

Many people don’t take the crime of counterfeiting seriously, they think that counterfeiting will not impact their lives, however, the fact is that counterfeiting has many negative impacts on the common man and thus has been named as the ‘Crime of the 21st century by Federal Bureau of Investigation.

On the global scale, the value of counterfeiting has reached a high of approximately 1 trillion dollars whereas, in India, the figure has shot up to I lakh crore annually. These figures clearly show the grim scenario of the situation.

Counterfeiting not only impacts the global economy but is a challenge for the governments, business organizations and most importantly the consumers. Counterfeiting not just dupes the consumer of his hard-earned money but also affects his health, besides this, there are many far-reaching impacts of counterfeiting on consumers. Let’s discuss the same.

Negatively affects the consumer’s health: What could be more dangerous than a counterfeit life-saving drug. Counterfeit medicines have created havoc in the industry, and it has become increasingly difficult to control them. Counterfeit or substandard medicines can have serious side effects on the human body and in some cases can even lead to death.

Dupes the consumer financially: Consumers who unknowingly purchase fake goods have to pay an actual price for a counterfeit. While it may sound good to purchase an original product at high prices but for a counterfeit, it is not at all good in any sense as you have compromise on quality.

Creates unemployment: There is a clear link between the rise of counterfeiting and the rise in unemployment. The business of counterfeits leads to monetary losses for the manufacturers which in turn affects the expenditure on current and future employees.

Poor infrastructure: Today’s common man needs beyond ‘roti, kapda, and makaan’. The government spends a good amount of money every year on rural and urban infrastructure. This money is collected from the taxes levied by the government on the business organizations and the common man. Since counterfeits evade taxes it leads to a drop-down in the money spent on infrastructure and development.

The problem of counterfeit goods is rising on Amazon, says AAFA

In a letter addressed to United States Trade Representative, American Apparel and Footwear Association (AAFA)- the trade group comprising of more than 1000 brands across the fashion industry wrote about the growing concern of counterfeiting on Amazon. Last year, AAFA had recommended adding Amazon websites in Canada, Germany and the United Kingdom to the list of notorious markets. Now the association is asking to include Amazon marketplaces in France and India to the same list.

AAFA identified around eight online markets as well as 130 physical stores involved in the sale of counterfeit goods. “Despite its role as a leader in the worldwide retail landscape, and as an important selling partner for many of our member brands, Amazon continues to present significant counterfeit challenges,” said AAFA president and CEO Rick Helfenbein.

“While we are happy to have seen increased engagement with Amazon on brand protection issues during the past year,” he added, “that engagement regrettably has not translated into a discernible decrease in counterfeits of our members’ products on Amazon’s marketplaces.”

The e-commerce giant has been facing accusations due to the sale of counterfeit products. With its expansion, Amazon has been increasingly reliant on third-party sellers to meet the increasing demand. However, the Seattle based company lacks full control over the third-party sellers which leads to the sale of counterfeit products.

In the past few months, Amazon has clamped down on fake products with the launch of Project Zero. The anti-counterfeit initiative uses an automated scanning tool and product serialization service, which helps to verify the authenticity of a purchase. Earlier in July, a federal appeals court ruled that Amazon can be held accountable for defective goods sold on its website by third-party merchants.

Source: Footwearnews.com

The Role of Anti-counterfeiting Technologies in Securing Supply Chains

From knock-off fashion accessories to fake mobile phones, automotive parts and pharmaceuticals, counterfeiters manufacture and sell inferior goods using another company’s trademark, brand name, logo or appearance. Benefiting from rapid developments in technology, these organizations use sophisticated means to duplicate items, making it quite difficult for customers to identify the true source of the products they purchase.

Counterfeiting is a serious crime punishable globally by fines that may run into millions of dollars and imprisonment of up to 20 years. Despite this, the counterfeit industry continues to cost the world economy hundreds of billions of dollars each year.

The Organization for Economic Cooperation and Development (OECD), an intergovernmental economic organization for world trade, estimates that trafficking in counterfeit products accounted for USD 250 billion in 2007⁠⁠ — approximately 1.95% of international trade. According to the International Chamber of Commerce, counterfeiting was a USD 600 billion business in 2011, amounting to 5% – 7% of global trade.

In a March 2019 report, OECD stated that trade in counterfeit and pirated goods has risen steadily in the last few years, even as overall trade volumes stagnated. According to the estimates, counterfeit trade currently stands at 3.3% of global trade.

Counterfeiting organizations are often linked to other organized crimes such as drug cartels, money laundering and exploitation of child labor. Even as law enforcement agencies increase efforts to shut down the illicit business, statistics point toward continued exponential growth in the sale and manufacture of counterfeit goods worldwide.

The need for effective risk management in the supply chain

  • China is estimated to account for 78.5% of the total counterfeit market, and along with Hong Kong, continues to be among the biggest origin countries for pirated goods.
  • Footwear, clothing, leather goods and electrical equipment are the top product categories targeted by counterfeit organizations.
  • Counterfeit and pirated products continue to follow complex trading routes, targeting certain intermediary transit points in supply chains, especially in countries where ports are not secured.
  • In 2016, up to 6.8% of EU imports comprised of counterfeit and pirated products. This amounts to as much as €121 billion.

Although it affects every product category, counterfeiting is more accentuated for businesses with a globalized supply chain. Supply chain management at large corporations can involve hundreds of links with each of those susceptible to intrusion by counterfeit organizations.

Counterfeit items can enter legitimate supply distribution chains at a number of points — the various component manufacturers, suppliers of raw materials, offshore assembly units, transportation, and even the retailers.

If not checked for quality, sources, proper delivery and authenticity throughout the supply chain, high-quality products may get replaced by cheap knock-offs at any point most convenient to counterfeiters.

As laws differ in countries, a manufacturer could potentially leave their product open to counterfeiting at any point in the supply chain when they target a market in a developing country. The market is characterized by businesses working with governments to reduce counterfeit trade. Preventive measures such as penalization, customs laws, and civil remedies work to some extent but fail to significantly reduce the problem. Often, in developing countries, regulatory authorities are ill-equipped to correctly identify original products from fakes.

There is an undeniable need to develop a far-reaching strategic approach to counter such criminal efforts with a multidisciplinary response and the active participation of a wide range of actors, each with their own expertise and specific areas of work.

The role of technology may offer significant contributions to step up deterrence and curb counterfeiting. The two most common technological solutions that companies employ are product authentication and track-and-trace systems.

Product authentication

Authentication methods allow customers to identify whether the products they’ve purchased are genuine or counterfeit. This usually involves assigning security holograms, QR codes and unique numbers or patterns to each product after the final quality check at the manufacturing unit. Scanning the unique code on their smartphone allows the customer to verify the genuineness of the product while informing the manufacturer about its successful sale. Security holograms for authentication can be found on nearly all credit and debit cards.

Track-and-trace systems

Track-and-trace systems are designed to help manufacturers identify faults in their supply chain. As the name suggests, these systems allow manufacturers to track product journey along the entire supply distribution chain from the production unit to end-customer, and customers to trace the products back to their original source.

Smart QR codes (in the form of labels or holograms) are assigned to each product. These are then scanned at every link in the supply chain using either specialized devices or smartphones. Failure to scan the right code on the right product reflects immediately in the supply chain database and allows the manufacturer to identify the point of failure and take appropriate action. This dramatically reduces the chances of intrusion by counterfeit organizations into the legitimate supply chain.

Added benefits

Anti-counterfeiting solutions such as track-and-trace systems allow manufacturers to not only keep track of their inventory at all stages of distribution but also make it easier to manage rewards and build customer loyalty. For more information on this, click here.

Conclusion

Counterfeiting is an exceedingly complex phenomenon. Legal deterrence like fines and imprisonment work to reduce the spread of fraud but do not eliminate it entirely.

With the global counterfeit industry on the rise, companies must take advantage of technological solutions to fight counterfeit. Some of the most effective methods include product authentication methods and track-and-trace systems.

While immensely effective in nearly eliminating the intrusion of counterfeit goods into legitimate supply chains, these solutions also offer added benefits such as comprehensive supply chain management, reward management, and loyalty-building.

For more on supply chain security, click here. To find an ideal track-and-trace solution for your business, click here.

Pashmina products to get BIS certification against counterfeiting

In a recent development in Leh, Ladakh the Bureau of Indian Standards (BIS) has released a domestic standard for identification, marking and labeling of Pashmina products – to certify their purity.

“The move will help to prevent the counterfeiting of Pashmina products and will protect the interests of artisans and nomads who are responsible for the production of raw materials and textiles”, said Smriti Irani, Minister of Textiles.

The step will help in determining better prices for the goat-herding community in Ladakh and handloom artisans producing authentic Pashmina items which are at a disadvantage due to lot of poor marketing practices, as per an official release.

Currently, around 2,400 families are rearing 2.5 lakh Pashmina goats which are domesticated and reared by nomadic communities called the Changpa in the Changthang region of Greater Ladakh. Around 50 metric tonnes of finest grade Pashmina (12-15 microns) is produced in Ladakh.

The Ministry of Textiles is developing a proposal for funding ₹20 crore for a dehairing plant in Leh that will lead to the progress of the Pashmina sector in the region of Ladakh.

Source: fibre2fashion

Why counterfeiting diminishes the chances of foreign direct investment?

The world is a global village as there is a high interdependence of countries on each other in different fields. From world-wide-web to culture, technological innovation to trade, military alliances to transport there are many scenarios in which the world seems to function as a unified whole.

Among the above-mentioned aspects, trade and investment play an important role in the economic development of countries. Of late, Foreign Direct Investment (FDI) has become quite important for third world countries when it comes to their economic development. FDI impacts the economic growth of the host country (a country in which investment is done) through the transfer of new technologies, organization of human resources, increase in employment, linking of global markets, the rise of infrastructure and much more.

However, the rise of counterfeiting can damage the FDI prospects of a country and its potential to create valuable innovation centres. FDI is important for both advanced and emerging economies to increase their productivity and output. Lack of intellectual property rights and anti-counterfeiting measures diminish the chances of FDI. In India, the industries most impacted by lack of FDI due to counterfeiting include equipment manufacturing and pharmaceuticals.

The total reduction in FDI due to counterfeiting and piracy is quite harmful to aspects like employment, infrastructure and socio-economic development. Countries are sceptical of investing in prospecting countries with weak IP laws as it may lead to counterfeiting of their products, theft of their technologies, reduction in their profits and damage to the brand image.

With the implementation of stringent regulatory measures and anti-counterfeiting technologies, duplication can be prevented to a large extent which will further brighten the chances of foreign direct investment. For ensuring impeccable security against counterfeiting it is must that supply chains must also be secured. A comprehensive outlook towards anti-counterfeiting guarantees the economic development of a country.

If you require customized anti-duplication solutions for securing your products and supply chains, then call us on +91–785-785-7000 or mail us at connect@holostik.com

How counterfeiting tarnishes the brand’s image?

There has been a humungous growth of fake brands in different industries. From counterfeit apparels to spurious medicines, fake footwear to duplicate watches the list seems endless. According to Global Brand Counterfeiting Report, “The amount of total counterfeiting globally has reached to 1.2 Trillion USD in 2017 and is bound to reach 1.82 Trillion USD by the year 2020.”

Brands are not just losing millions of dollars every year due to counterfeit products but are also facing many other challenges. Perhaps, one of the biggest challenges faced by organizations due to counterfeiting is the damage to their brand reputation.

Over the past few years, the proliferation of fake goods has bought a major change in consumer buying behavior. According to sources, a large number of consumers are less likely to buy products from a brand if its reputation has been tarnished due to counterfeit goods. Even in the e-commerce space, consumers are less likely to buy products from websites that have earned a bad name due to counterfeiting.

Counterfeit products have a direct impact on the confidence of the consumers buying a brand. A large number of consumers who have purchased fake products unknowingly never buy the same product again and tend to switch over to another brand.

If a consumer is duped into buying a fake product and later discovers that the product is not worthwhile then it leads to a blow on his confidence in the product and the brand. Moreover, such brands are more susceptible to negative word-of-mouth publicity.

So, if a consumer receives a fake product then there are high chances that the genuine brand and manufacturer may earn a bad reputation.

In the online space, customers leave negative reviews for such brands which jeopardize their reputation. This sometimes creates a false narrative that even brands manufacture low-quality goods. Regular news related to counterfeiting of a specific brand can create an assumption in the minds of consumers that the brand is not serious regarding duplication and is not taking stern measures against counterfeiting.

However, companies across the world are now taking serious measures against the problem of counterfeiting. The online retail giant Alibaba which has earned a bad repute for counterfeit products has made a task force to handle counterfeits on its platform. Besides organizations have also implemented different anti-counterfeiting products and solutions to secure their products and brand.

Holostik provides tailor-made anti-counterfeiting products and solutions which help in securing the product and the brand’s image from the problem of counterfeiting. If you are facing the problem of duplication call us now on +91–785-785-7000 or mail us at connect@holostik.com.

Counterfeit Peppa Pig items seized by Economic Offence Wing in Mumbai

In order to fight fake products and stop the illegal use of its Intellectual Property (IP), Viacom18 Media Pvt. Ltd. Joined hands with the Economic Offence Wing of Mumbai Police to conduct raids on businesses dealing counterfeit products of its brand Peppa Pig. A big number of counterfeit products were seized during the raids.

Anil Lale, General counsel, Viacom18 said that the Govt. of Indian has seriously taken up the issue of piracy and illegitimate use of IP over the past few years. We are proud to work with public agencies like the Department of Industrial Policy& Promotion, Maharashtra Cyber Crime Cell and Mumbai Police’s EOW in the fight against counterfeiting.

He also said that it is important to admit that the sale and purchase of fake products are serious offences as piracy and diminishes the brand’s royalty. As rightful IP rights owners, we feel it is our duty to the customers that they may not receive fake products.

Tim Pfeiffer, SVP Business Affairs, Family & Brands, Entertainment One said that eOne believes in taking vibrant brands from screens to stores and it is very encouraging to see our international partners and authorities undertake efforts that ensure only real products reach our young audience. Counterfeit merchandise is not only against the licensor’s interest but also has a colossal impact on the safety and health of the user due to the absence of quality standards.”

The Economic Offenses Wing has been fighting against counterfeit products. In the last few years, they have been able to dismantle businesses which deal in the trade of counterfeit products.

Source: Exchange4media.com

CropLife India conducts workshop on counterfeit pesticides

CropLife India recently organized a workshop for pesticide dealers at Vadodara. The workshop was organized with the help of Kruti Charitable Trust. The workshop was attended by pesticide dealers from Vadodara and Bharuch districts who discussed the rising problem of counterfeit, spurious, substandard and unregistered/unlicensed pesticides.

The key officials present at the event were Jatinbhai Patel, Agriculture – Extension Officer; Hiranbhai Patel, Secretary, Central Gujarat Dealers’ Association and Mukeshbhai Raj, President, Dealers’ Association, Karjan.

Asitava Sen, Chief Executive Officer, CropLife India while speaking at the event said, “CropLife India will continue its fight against duplicate and illegal pesticides. The products are unable to kill the pests and are harmful to the crops and the environment. Dealers play an important role in the supply chain as they can ensure that farmers receive only genuine pesticides.”

The workshop focused on the various ways of detecting counterfeit, spurious, substandard and unregistered/unlicensed pesticides. The dealers shared the challenges they have to face while company representatives shared their perspective on probing the source of pesticides. Educating farmers became an important part of the entire discussion.

The workshop also focused on different ways of detecting fake, spurious, substandard and unlicensed pesticides. The dealers shred their challenges which they face regularly whereas company representatives discussed their views on determining the source of fake pesticides. The workshop helped the dealers on different procedures and aspects of avoiding fake products.

CropLife India has an ongoing anti-counterfeit mass awareness campaign in the villages of Amod, Bharuch, Karjan and Padara districts of Gujarat. CropLife India has tied up with Kruti Charitable Trust for this campaign who would reach out to 175 villages across the district for raising awareness on fake, spurious, substandard and unregistered/unlicensed pesticides.

Until now CropLife has organized rallies, puppet shows, video shows, messaging through loudspeakers for creating awareness among people regarding spurious and illegal products.

Source: NewsVoir