Quantifying the impact of counterfeiting today

Globally, counterfeit goods account for more than US $500 Billion in trade. A significant portion of goods detained by customs authorities is pirated or counterfeit products. Technology lead innovation is the answer to the US $500 billion Counterfeit Goods Market.

Counterfeiting, where unauthorised copies of products are sold as original products, is usually perceived as a victimless crime. However, counterfeiting impacts several key stakeholders – from the consumer to businesses and the government itself. Consumers are duped into buying sub-standard products, businesses become less likely to invest in product innovation, and the government suffers immense loss in revenue from customs duty and import taxes. Trade association FICCI estimates the global economic and social cost of piracy and counterfeiting to be upwards of US$1 Trillion 2022.

The act of finding cheaper alternatives/dupes to luxury goods has increased in demand, especially in a country like India where most of the general public fall in the middle-class sector with a high consumption for brand and brand value. Counterfeit goods continue to flood both offline and online markets in India. This is because the scale of the issue in the Indian context requires innovative solutions.

Online retailers are taking the lead in deploying innovative anti-counterfeit measures and have already begun implementing internal measures to root out fake listings in partnership with brands who are motivated to protect their IP. AI/ML technologies are being used by these platforms to scan shopping listings for fake goods. This allows large batches of listings to be scanned in real-time, making the process more efficient and fast than doing it manually.

Indian economy is deeply impacted by the advent of counterfeit goods. The government, too, should formalise the use of emerging technology to identify counterfeit goods, expedite investigations and catch bad actors. It should explore partnerships with technology service providers and e-commerce entities to implement tech solutions at scale and conduct training for its officials.

Another solution is to explore the use of blockchain technology. It is a highly secure digital record of information analogous to a ledger. Counterfeiters commonly attempt to pass off fake goods as original items, and tracing the source of these leaks will greatly improve enforcement. Tampering with a shipment gets logged on the blockchain and can be easily traced back to the originator. This will allow law enforcement to accurately trace the source of a leak in the supply chain, such as stolen product shipments or stolen packaging.

The right way to tackle counterfeit goods lies in the early adoption of tech solutions, and pooling the best practices of established players on these measures can help fasten the process.