15/08/2014

By Simon Wright, Managing Director at Greenwich Design


In his recent book Brand New, Wally Olins explored the impact of authenticity on brands and branding. However, while this is undoubtedly a hot topic, there is one element of authenticity that has serious implications in the design world – but which seems to be forgotten: counterfeiting.

The European Commission say that counterfeiting and piracy could be costing the UK economy up to £30 billion and over 14,500 UK jobs. Yet many brands are completely unaware that they could be affected by counterfeiting or, worse still, they understand that it is happening but aren’t doing anything about it. Instead they are used to the idea that they are losing money this way – a percentage of profits written off.

Awareness of this subject needs to be raised, particularly as the problem goes far further than fake Louis Vuitton bags and pirated DVDs. In some markets where counterfeiting is prevalent, because of the nature of the products it can actually be life-threatening as well as a means for brands to lose £millions. As the BRIC and MINT economies continue to grow, the desire for more branded goods is driving more opportunity for the counterfeiters. Without appropriate action, the problem will escalate rapidly.

While many global corporations have been quite oblivious to the problem so far – with an awareness of which of the markets that they are trading in are most likely to be affected by counterfeiting but completely unaware of exactly how much they could be losing – there are specific sectors that have been more switched on.

So how is the issues best tackled? The basic measures against counterfeiting, registering IP and copyright for example are ignored in China so brands that want to take action have had to use intellectual thinking in order for prevention to be successful. The perfume and pharmaceutical sectors, which are increasingly affected by counterfeiting have long used innovative packaging design and security methods as deterrence; however counterfeiters quickly learn to produce identical packs, copying watermarks or even holograms.

Design certainly can have a huge impact and be a great enabler for brands in tackling counterfeiters head-on. Going back to basics, creating a strong brand is the first thing that really helps in drawing attention to an imitation product. Consumers can spot even the slightest shade or colour difference used for a logo and are instantly wary of the products authenticity.

Some areas that we have worked in have required ultra-sophisticated anti-counterfeiting methods, made possible through design and technology. These include:

1) Pure graphics and markings – using different methods involving batch numbers, barcodes, special inks and markers all of which can be tested through scanning which will show if the ink and therefore product is genuine – similar to methods used to identify fraudulent currency
2) Anti-tamper packs – This way the user knows instantly if the pack is counterfeit. Inside the product also has a code which can be scanned. Here QR codes are often used.
3) Product dispatch codes – this is something that is used a lot in car manufacturing – the product codes are traceable to the manufacturer.
4) Covert technologies, even markers in the product itself.

The oil industry is one that has been hugely affected by counterfeiting, with many of the world’s most well known brands having to set up huge operations and anti-counterfeiting divisions to tackle the issue because it is so dangerous – if a car breaks down on a motorway due to poor quality counterfeit oil it is potentially fatal. This is also why there has been so much R&D into counterfeiting prevention in the pharmaceutical industry as it too is an area that is much more dangerous.

The reason it is such a big problem within the industry specifically again in the BRIC and MINT countries is that there are so many distributors and complicated processes involved that the opportunity for counterfeiters is so tempting. A lot of money has been spent into coding products so that consumers can trace online if the product they have been sold is genuine, this also requires a huge, intelligent communication programme to alert consumers of the anti tampering methods in a way that enhances rather than damages the brands reputation. However, this also means the risk that the counterfeiters become aware of methods used – brands have to ensure they stay one step ahead. In order to be successful global organisations need to implement a counterfeiting task force which operates 24/7.

Counterfeiting really is a sensitive issue to manage - how can organisations get the balance right without alerting counterfeiters to the fact that action is being taken? Brands need to spend time getting the strategy right as it is an issue that is growing daily. We need to start to see best practice discussions and seminars around counterfeiting appearing much higher up the business agenda in order to begin to tackle the problem.