The Dangers of the Counterfeited Goods Supply

CEO and founder of VST Enterprises, Louis-James Davis, created the company’s technology to help tackle the huge limitations with serial numbers, barcodes and other scannable codes that are vulnerable to mass counterfeiting. Below he explains to CEO Today the huge dangers of counterfeiting on innocent individuals and businesses – and how consumers will be the ones to stop it.

Since the rise of international ecommerce, consumers are more willing to transact with lesser known retailers; and they’re arguably more likely to overlook the origins of their purchase in order to secure a good deal. However, there are negative side effects from purchasing untraceable goods; not solely safety and ethical concerns but from issues with quality as well.

While cheaper goods can seem like a good deal, they are consistently of lower quality and are often combined with damaging chemicals during production, proving harmful to the consumer. So when purchasing a product, consumers should be guaranteed the real deal, not a cheap “knock-off”.

Additionally, trading of “knock-offs” poses a serious threat to the prosperity of the genuine brands that are being faked. Every time a knock-off product is purchased, money is being siphoned away from the company whose brand is being imitated.

Humanitarian first

Truth be told, most counterfeit goods come from the hands of children and adults from low social and economic backgrounds who have been forced into unlawful labour. It is the vulnerable who succumb to this kind of labour and it is time to address the opaque practices, weak rule of law and high demand for cheap labour that is causing such damage.

According to Baptist World Aid’s 2017 report, two thirds (67%) of the fashion companies surveyed are making efforts to train suppliers, buyers and factory managers to understand human trafficking, child labour and forced labour risks. But calling out instances of human negligence is not enough to end the blight of counterfeit goods.

Government schemes

It’s no wonder that governments are looking to tighten traceability legislation to protect innocents from the immense fallout of counterfeiting.

New industry initiatives have been put into place by industry bodies to monitor the supply chain, from material sourcing, to sale and beyond, but there’s currently little connectivity between these systems and disclosure of supply chain information remains patchy.

Closing the loop: The missing link

To fully protect governments, manufacturers, retailers and consumers, we need to address traceability issues: verify where products have come from and been, before, during and after a sale. A completely integrated goods ecosystem is necessary to truly protect everyone from those who manipulate shortcomings in production and distribution.

Traceability has been hampered by technological limitations. The EU commission previously trusted open-source codes for the region’s provenance checks, but serial numbers, barcodes and QR codes have huge limitations. They are open to misuse and unsuited to fulfil legislations with provenance checks.

The future of the secure supply chain lies in closed-loop technology to help boost tracking and overthrow counterfeiting at the source. The EU commission approached VST Enterprises based on its state-of-the-art approach to 2D barcoding, and awarded its technology, VCode, the EU Seal of Excellence for its anti-counterfeiting and end-to-end supply chain and traceability capabilities.

A handful of companies can check provenance and supply chain management, but where the VCode really differs is in its design – it is a closed-loop system that gets provenance checks down to a consumer level.

Consumers as policeme

By scanning VCodes printed on garments and goods with their Apple or Android device, users can ensure the validity of products – this can be anything, from the factory it was made in, to the raw materials used.

Constantly evolving, the technology has identified the missing link in the supply chain, providing full traceability to remedy it. In doing so, it is set to eliminating counterfeit and fraud, while providing consumer confidence that products are genuine, safe, and traded without exploitation of people or natural resources.

Leading fashion business, Dewhirst has already embraced the technology. The company that manufactures garments for 80 of the world’s largest brands (such as Nike, Adidas and Asos) and produces 10 million garments per week has begun implementing VCode so consumers can perform their own certification checks. Additionally, Dewhirst can engage with consumers after the purchase via GDPR-permitted push-back notifications.

This is just the start. When a versatile closed-loop system becomes commonplace to monitor the supply chain, the possibilities are infinite and the anti-counterfeiting results are definite.