Counterfeiting is an issue that genuine companies worldwide have been struggling to deal with over the years. Issues related to counterfeit products are not only damaging to customers but also to brands. It is companies and customers of luxury products like jewels, electronics, wine, and so on that get into trouble the most due to counterfeiting. Statistics show that the value of counterfeit goods doubled from 600 billion dollars in 2011 to 1200 billion dollars in 2015. Such numbers are alarming, to say the least.
What are the damages caused by counterfeiting?
- Tarnishing of brand reputation: Not only does counterfeiting result in the loss of money for brands, but it also reduces customer appeal as well. Studies show that 88% of consumers who have been the victims of counterfeiting are of the opinion that it is the responsibility of brands to tackle the problem. Once a customer receives a counterfeit product, he/she is likely to feel turned off from the brand entirely. While 26% of customers stated that they stopped spending money on the particular brand after experiencing a counterfeit, 23% started having negative perceptions about the brand. 27% of consumers even stated that they discouraged their family and friends from using the brand’s products. These studies show that the circulation of counterfeit goods can cause serious damages to brand reputation and sales. It can take a long time before customers ever start trusting the brand ever again.
- Significant monetary losses: Customers who purchase counterfeit products end up losing large amounts of money that they usually have no way of recovering. Since counterfeiting and duping tends to be a regular occurrence in the luxury and electronics industries more than others, there is always significant monetary incurred by customers for every single counterfeit purchase. Such instances can be financially damaging for brands as well.
- Dangerous health risks: The consumption of counterfeit food and beverage products can cause severely negative impacts on the consumer’s health. The spiking and adulteration of wine is a common problem that wine lovers often face. Counterfeit drugs and fake food can also cause serious health risks to the consumers.
How can counterfeiting be tackled digitally?
Though counterfeiting and forgery have been practised throughout the centuries, there has recently been a rise in the demand for the eradication of counterfeiting once and for all. Blockchain technology is what’s making the business world hopeful again about bringing a positive change to the global counterfeiting situation. Though there is still a long way to go, blockchain is taking the global market a few steps ahead in efficiently dealing with counterfeiting, fraud and forgery.
It is through the holes in the company’s supply chain that counterfeiters find a way to sell their fake products. Therefore, in order to deal with the issue, it is important for each company to have a strong and fool-proof supply chain system. With the power of blockchain technology, creating an efficient supply chain will be a piece of cake for brands.
For instance, Authlink has been assisting brands in making their supply chains airtight and transparent. Each product gets its own unique digital identity and the related information is uploaded into the blockchain system without fail. Relevant data such as supplier and retailer information, location of the product, etc are duly recorded in Authlink’s system.
Brands and customers can keep track of the product, and make sure that nothing slips along the way. Authlink also provides valuable data about counterfeiting cases in each location, so that brands can be more prepared to deal with the issues. It can be difficult for customers to gain trust in a brand again after a counterfeiting incident, but Authlink’s after-purchase customer service initiatives will ensure that brands will win the loyalty of customers in the long and short run.