E-commerce fakes: How online retailers can curb counterfeiting without messing with customer experience

In India, counterfeit products cause over Rs 1-lakh crore loss annually in India.

• By S Swaminathan

According to the World Customs Organization (WCO), 7-9 per cent of global trade consists of counterfeit products. One of the main reasons behind this rapid growth of counterfeit industry is the inability of existing supply chain networks to combat the issue. The impact of counterfeit can be seen in trade, industry innovation, and most importantly, on the health and safety of buyers / consumers. This also leaves a negative impact on the brand image, leading to loss of revenue for businesses.

In India, counterfeit products cause over Rs 1-lakh crore loss annually in India as claimed by ASPA, an industry body working on anti-counterfeiting solutions. The impact of counterfeit is even more difficult to ascertain in case of e-retailing, where orders are taken by the e-retailers and shipped directly by suppliers. This not only makes e-retailer liable for the quality and authenticity of products but also lends him with negative reviews if the customer receives counterfeit/low quality product.

Additionally, it is difficult for consumers to distinguish between authentic and counterfeit product, alienating him from the brand as well as the e-retailer. This stresses the need for businesses to adopt anti-counterfeiting solutions along with adequate awareness and monitoring as counterfeit products.

The answer to counterfeit lies in greater visibility, traceability and transparency across supply chains from manufacturing to point of sale. We are privileged enough to exist in a period where the digitization of business operations is becoming the trend and rapidly hitting the masses and gaining their trust. These offers brands or companies an incredible ability to digitize their supply chain and expand data awareness by tracking their products from farm-to-fork where it provides end-to-end product visibility which helps in detecting counterfeiting at any level of the supply chain process.

Also read: In a first, Amazon to hold Prime Day sale in India before US; products from small businesses in focus

Further, it is important to note that these standards are interoperable, enabling all supply chain trading partners, irrespective of the business size, to share information. On the other hand, brand owners and/or and government agencies can use this information to detect and arrest counterfeits.

The adoption of global standards in the supply chains enable brand owners and product manufacturers to implement a standards based traceability solution, which is interoperable with all trading partners, enabling them to share size in the same framework, irrespective of the company size and technology used.

Standards-based traceability solution, which runs across the supply chain, is the first and the most crucial step towards complete, end-to-end visibility over supply chains. It enables brand owners/ companies to easily track and trace the products’ location starting from its origin till its destination. This also helps in effective product withdrawals or recalls during the time of crisis, increasing consumer confidence through enhanced product safety and improving business efficiency by reducing errors.

Information capturing and sharing of constant information assumes a significant job in assisting with making sure about supply chains and diminishes the odds of danger of fake infiltration while items are in development. Subsequent to being distinguished, items can be effectively cross-checked and confirmed online through a database at each point of the supply chain. The appropriate response lies in more prominent perceivability, detectability and straightforwardness from crude material to retail location. Creating and developing protected supply chains is basic and also to expand trust and straight forwardness into exchanging accomplice connections, and not exclusively to relieve the danger of fakes.

S Swaminathan is the COO at GS1 India. Views expressed are the author’s own.