Nigel Allen, marketing manager – 2D codes and high resolution at Domino, talks about the role of variable data printing (VDP) against counterfeit products. In a recent webinar, he explained how digital variable data can help brands protect their products against illicit trade and distribution. He suggested that these codes can also raise consumer awareness of the risks associated with counterfeit and grey-market goods.
VDP enables the printing of unique identifiers such as serial numbers, QR codes, or barcodes on each product. These identifiers can be linked to a central database, allowing for easy verification of authenticity. Each product can be tracked throughout the supply chain, from manufacturing to distribution to point of sale. This traceability helps in identifying and eliminating counterfeit products at various stages.
“Globalisation and free trade are making it easier than ever for consumers to research and purchase branded products from an ever-growing number of eCommerce retailers. With the cost of living continuing to bite hard, many consumers are shopping around to try and find the lowest-priced items available and falling foul of unauthorized third-party or counterfeit sellers,” Allen states.
The rise of counterfeit and grey market activity
Branded products at lower prices are a common sight, especially in India. Like every city and town, in Delhi, counterfeit products such as clothes, shoes, bags, and other wearables have their bargain markets such as Sarojini Nagar or Nehru Place, which is also said to be a huge market for counterfeit PCs, laptops, and electronic parts.
“Some of these items may be genuine products diverted from official supply chains and sold by unauthorized resellers, perhaps through illicit distribution channels. In such instances, products are imported from countries with a lower selling price to be resold, offering savings against the local retail price on the ‘grey market’ – said to be a 20-billion-euro industry,” according to Allen.
Product diversion onto the grey market is often price-driven, and commonly seen in coveted high-end designer brands, luxury goods, electronics, and fashion. This grey market practice can be damaging to the brand holder’s sales efforts and reputation. Many products now found online at a lower price point are also counterfeits, mimicking the look of genuine products, but may be sub-standard in quality. Some of the most common counterfeit goods currently on the marketplace include makeup, skincare products, supplements, and medications.
So, how can brands protect themselves and their consumers from product divergence and counterfeiting?
As Allen says, anti-counterfeit packaging is a great place to start – and can be as simple as equipping products with unique identifiers within scannable 2D codes, such as QR codes powered by GS1 (a global system of standards that provide a framework allowing products, services, and information about them to move efficiently and securely). Such codes can be used for product verification, while also providing options for traceability. Using VDP in conjunction with mobile apps or online verification platforms, consumers, retailers, and authorities can authenticate products in real-time by scanning the unique identifiers.
He adds, “Digital print provides a cost-effective way of adding such features onto packaging and labels – either within the factory as part of a late-stage customization process, or via a converter providing an outsourced labeling and packaging service. Businesses already benefiting from cost-effective digital print for labels and packaging can easily implement product verification by adding variable codes to their designs at virtually no additional cost.”
Today, an increasing number of logistics providers have recognized the significance of protecting their client’s brand reputation, and many are now offering services to uniquely identify and verify products via scannable 2D codes. VDP provides concrete evidence of authenticity, which can support legal actions against counterfeiters. The unique identifiers printed by VDP serve as proof of the legitimate origin of products, aiding in legal enforcement efforts.
“The fight against counterfeits and grey market products is global and reaches every industry – from industrial goods, electronics, and automotive to food and beverage, life sciences, and personal care. Today, with industries and consumers around the world all facing the same economic pinch, the risk is more real than ever – and the industry is starting to take action,” he concludes.
