Beauty brand tackles counterfeiting and diversion

OzNaturals selects Systech to secure global supply chain

OZNaturals' anti-aging skincare kit

Product counterfeiting and diversion plague every industry. That’s why brands like OZNaturals, a leader in natural skincare, are proactively confronting these supply chain threats.

OZNaturals has spent the past six years building a global distribution network and now sells in over 80 countries, including India. Previously, the company sold almost exclusively online, and according to the company’s statement, the diversion was not an issue. As international sales increased, both diversion and counterfeiting became greater issues. Despite having a strong distribution network with only a handful of primary distributors, OZNaturals has a diversion issue. With their current tracking solution, the company can identify where diversion is happening and some of the offenders, but not nearly enough.

In addition, counterfeiting has been occurring for several years and is only getting worse. The company has only been able to identify that the most significant culprits are operating out of China. Products and packaging are being counterfeited, with both counterfeit and real product co-mingled into counterfeit packaging. Counterfeiters are even replicating the UPC codes, lot numbers, and sequence numbers from authentic boxes.

According to Systech, this combination of counterfeit and diversion issues has begun to tarnish the brand’s reputation and value within specific marketplaces, creating a hesitancy for retailers to take OZNaturals products from authorized distributors. When retailers find OZNaturals’ products in free trade zones or unauthorized retail venues, they know that the product is being commoditized. Culprits are introducing both fake and diverted products into the supply chain, and these retailers don’t want to stock a brand that’s been diluted by dubious products in the marketplace.

Solution – Current approach

OZNaturals deployed a serialization solution to manually track and trace products to the case and pallet level. Every case gets a unique identity, and they are tracking which customer is getting what product. The manual solution is somewhat effective, but far from perfect.

Despite the inherent flaws of a manual track-and-trace solution, they discovered many fake products in the marketplace. The company realized that if no additional steps were taken, it risked losing major distribution channels. This became the main driver for OZNaturals to confront counterfeiting and diversion threats head on proactively.

Systech Brand Protection Suite

Systech stated that the first proven line of defense is product packaging. While numerous overt and covert technologies can be added to a package such as holograms and special inks, most can be easily counterfeited. OZNaturals decided that the ability to utilize their existing product packaging was an essential component of an effective anti-counterfeiting program. The company selected the Systech Brand Protection Suite to secure its global supply chain.

According to the company, Systech’s non-additive product authentication technology is a brand protection game-changer. It turns an existing package QR or barcode into a unique digital eFingerprint that’s claimed to be impossible to duplicate. Results from an independent study by Salt Hill Statistical Consulting confirmed that the probability of a counterfeit product authenticating as a genuine eFingerprinted item is less than one in 55 quadrillion. Using a smartphone app, consumers, distribution partners and field inspectors can instantly authenticate products anywhere in the supply chain. They know immediately if a product is authentic and where, when and to whom the product was initially manufactured and shipped.

Next steps

The Systech Brand Protection Suite will empower distributors and loyal customers to ensure that each OZNaturals product is authentic and being sold as intended, the company added. OZNaturals sees the Systech mobile app as a facilitator to protect its brand and develop customer loyalty. Encouraging customers to authenticate OZNaturals products as they purchase or receive them serves two purposes – Instill confidence in the purchase by providing a quick and infallible authentication check and serve up customer loyalty or reward program offers.

According to Systech, this approach can dramatically increase the number of authentication checks in the marketplace via a large consumer base. Customers are motivated to interact with OZNaturals products because they derive a personal or monetary benefit while helping combat counterfeiting and diversion. This consumer engagement strategy will help improve brand protection outcomes by offering OZNaturals invaluable supply chain and marketplace data.

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