Tackling the menace of online counterfeiting

It is estimated that there are about 20 million e-commerce stores selling products on the internet around the world today, which generate more than one trillion US dollars in revenue each year. India's E-commerce revenue was close to US$ 39 billion in 2017, and is expected to jump to to US$ 120 billion in 2020, growing at an annual rate of 51 per cent, the highest in the world. Our country is rapidly on its way to becoming one of the world’s largest markets for e-commerce, with mobiles, consumer electronics, fashion products, books and tickets being the top categories. One of the most evident reasons for this is the fact that e-commerce eliminates limitations of time and geographical distance for the buyer, and streamlines operational processes to achieve lower costs.

The flipside

Though this sounds very positive, it is not entirely good news for some. Counterfeiters have also taken note of this growth, and have gone to great lengths to adapt themselves accordingly. There is news of fake products being sold online almost every day. Counterfeiters create fake websites that look very similar to the original manufacturer’s own website, and then trick unsuspecting consumers into paying for products that are duplicate, substandard, or those which simply never arrive. These websites look very legitimate, and it is very difficult for consumers to spot any differences between them and the genuine brand. In the process these websites also store the consumers’ bank and credit card details which may be misused any time.

Even social media is targeted

Social media platforms are also being leveraged by the counterfeiters. This is done by establishing private groups that link sellers and buyers together on social networking websites and applications which support forums, bookmarking, curation and wikis. The sole purpose of these sites is to entrap consumers with fake offers, non-existent features and too-good-to-be-true prices.

These counterfeiters are further encouraged by the fact that social media sites do not seem to be interested in addressing this issue, and leave it up to the brands to take action.

Meeting the challenge

This onslaught of online counterfeit goods needs to be tackled on more levels than one, but it is easier said than done. Genuine brands, retailers and supply chains face a tough time in keeping counterfeit products at bay – continuously evolving to employ tracking technologies and anti-counterfeiting measures. Sadly, there are also some sections of the industry who still believe that counterfeiting is a problem which only affects others, and is not too pressing for their particular companies. There are some who do acknowledge that counterfeit products exist, but believe that only an insignificant percentage of their products are counterfeit and these products in the market can actually enhance their brand to some extent. And then there is another group of people who do face major problems due to counterfeit products but think that the problem is too big for anyone to do anything about it. These people have accepted this as ‘just a part of doing business’.

Some brands do wish to try and address the counterfeit problem, but are unsure where and how to start. They lack the necessary data and proper guidance to help them in making informed decisions about what to do. Many of these companies are not well resourced in terms of people or finances, and are always under pressure to do more with less.

Best Practices

More and more brands today are working towards putting efficient and effective procedures and systems in place. These procedures have consistently shown positive results in their fight against online counterfeiting.

A major chunk of counterfeit products is bought from Chinese markets, and then shipped to different countries via courier and sold to consumers on local online marketplaces. These products may also be offered for sale via posts on social media platforms.

Here are some best practices for businesses to follow to combat this situation:

  • Brands should register their trademarks in all the countries / locations they are selling their products in. Ensuring that China and Hong Kong are registered will be a big plus, since most high-value counterfeits originate from here.

  • Brands should register their domain names covering all their trademarks and products

  • It will also help to register trademarks with customs and organise regular training programs for customs officials to ensure that brands are always a step ahead of counterfeiters. It is important for customs to adopt a zero-tolerance approach towards the import of counterfeit goods. The same importance should be given to every consignment irrespective of its size or value. Customs officials should not ignore seizure requests from brands only because the consignment is too small.

Online marketplaces, search engine results and social media should also be monitored on a regular basis and infringements acted on quickly. Taking no action at all will invite more counterfeiters because they feel they can operate online with little interference.

Not a Victimless Crime

Contrary to popular belief, counterfeiting is not a victimless crime. Fake products may look like the original, but can often be dangerous, ranging from exploding phone chargers, poor quality cosmetics and fake cigarettes and alcohol – these goods fail to meet safety standards and have much shorter lifespans. Inferior quality components in counterfeit electronic goods, such as phone chargers, can lead to electric shocks, fires and explosions, while fake children’s toys and clothes can pose hazards through dangerous small parts or toxic materials. Counterfeit cosmetics may contain toxic ingredients like arsenic, lead and mercury which can lead to all sorts of skin irritations or even poisoning, while fake alcohol may be mixed with substances like methanol which can seriously affect health or cause loss of life.

In addition to being dangerous for consumers, trade in counterfeit goods are also harm the economy, undermining legitimate retail businesses and traders, who support the economy and provide genuine jobs for people. It won’t be so cool to tell your friends about the counterfeit Rolex watch you bought when you come to know that trade in counterfeit products funds drugs, arms used by terrorists and slave labor.

Final Thoughts

Online brand protection is a major challenge, but it is not impossible. Companies can give themselves the upper hand by employing the many anti-counterfeiting and anti-tampering solutions available today. Technological breakthroughs have given way to processes like end-user authentication and supply chain monitoring. By understanding the best practices and having robust systems and processes in place, brands can come together to combat and win against the illicit industry of counterfeiting.


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