How the Internet of Things beats the counterfeiting industry

| Michael Baucke

Counterfeiting unfortunately is a big industry, bringing in billions every year. But the solution that could put an end to it is both mature and simple.

When imitation isn’t flattery

In 2016 it was reported that fake goods now make up 2.5% of all international trade. To put that in context, it means counterfeit materials are responsible for roughly the same global economic output as a country with a population of over 8.5 million people.

In the EU, this figure goes up to a whopping 5%. Yet others estimate it’s higher still, claiming the counterfeit goods market represents around 7% of total world trade.

And it’s an epidemic that can affect any industry, from electronics to pharmaceuticals. The most commonly counterfeited products though, are clothes, accounting for around 12% of all the cases discovered.

A battle fought on three fronts

Fake products can cause a lot of damage, harming profit margins and even ruining brand reputations in instances where they’re not properly constructed.

But that’s not the only issue. In some cases, designer brands have found more than half the products in their own outsourced factories have been produced without authorization and sold through alternative sales channels.

There are problems with legally manufactured products too. Specifically, those that are sold at a lower price into ‘grey markets’.

If you couple this with the fact that money from counterfeiting is also used to fund further criminal activity, like the firearms, drugs, and trafficking trades, then the scope of the issue becomes immediately apparent.

So, what do we do?

A digital mark of authenticity

The good news is, there’s a smart—and mature—solution that can tackle these problems head-on.

NFC (Near Field Communication) enabled tags to be embedded in virtually any item or product—be it a fashion accessory or engine part—providing a unique digital identity from which each and every product can be authenticated.

These tags are incredibly small, long-lasting, and easy to produce. Most important, the authentication process is very user-friendly. All your customers, suppliers or even customs officials need to do is tap the product with an NFC-enabled smartphone or tablet. The good news is that most smartphones and tablets are NFC-enabled today.

There are three big benefits to this approach.

Firstly, with the tap of a smartphone consumers are able to easily identify whether or not the product they’re looking at is genuine, or a convincing counterfeit—meaning they have peace of mind that they’re buying quality.

Secondly, this technology can help manufacturers track their products if they enter grey markets.

And finally, since the unique digital identity is meaningfully harder to reproduce and duplicate than products, this approach actually acts as a deterrent against further grey market activity. It just becomes harder to counterfeit.

With the help of this simple technology, catching counterfeits and fighting forgery could prove to be both easy and inexpensive. That’s a big opportunity to stop the burgeoning counterfeiting industry. And one we probably shouldn’t ignore anymore.

Learn how to make your products smarter in our e-book “Implementing the Internet of your things”.

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