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Utilizing Technology To Reduce The Risks Associated With Counterfeit Goods in FMCG

Counterfeit items have a broad economic impact on commerce, investments, jobs, development, ecology, and, most crucially, consumer safety and wellness. They also deteriorate a company’s brand image, resulting in losses for businesses and governments. . Counterfeit goods account for around 8–9% of total trade, resulting in revenue loss. 

According to CII, the FMCG counterfeit business was projected to be worth Rs. 68,000 crores in 2014, showing the scope of the problem. 

Given the emphasis on India’s industrial prosperity and the highly anticipated growth trajectory, technology and innovation will be critical in determining India’s strategy for development. However, counterfeiting can potentially hamper this development unless businesses take action to combat counterfeits and fakes. 

How Effective Are Traditional Methods of Counterfeiting? 

Factually, anti-counterfeit measures for packaged goods included holograms and QR codes. A hologram is a graphical approach to achieving authenticity goals that do not rely on any external system. When done correctly, a complex holographic sticker can be an effective anti-counterfeit measure that is also simple to implement at scale.  

However, regardless of how much revenue businesses invest in good holograms, any fraudster with the correct technology can imitate the hologram instantly, which also applies to QR codes. Furthermore, holograms and QR codes are artworks created on the packaging that is the easiest to replicate. 

Luminescent top coating is another popular option that can be put on product labels of any color or as a bespoke logo. 

It is invisible except under UV light and thus difficult to copy; nevertheless, counterfeiters with the correct equipment are able to mimic it. The coating ink also peels off with repeated light and temperature exposure. 

RFID is another, more contemporary anti-counterfeiting measure (Radio frequency identification). It entails using microscopic memory devices pre-programmed with labelling information and then inserted into a product.  

They do not require line-of-sight and can be as small as necessary, allowing for greater versatility in the types of products that can follow. However, because each package requires its device, they are incredibly expensive to install at scale. 

Technological Approaches To Combating Counterfeiting 

Companies of all sizes realize the importance of implementing foolproof anti-counterfeit systems to protect their consumers and reputations. Customers are becoming more aware of where their orders are coming from. Several modern technologies can assist in tracking each product when it is sent. 

Scanners for Smartphones: Smartphone penetration in India has reached 54 percent in 2020 and is expected to reach 96 per cent by 2040.  

Taking advantage of the widespread use of smartphones, manufacturers are developing solutions that are smartphone-friendly and hence customer-friendly. This allows for fast identification of whether a product is genuine or counterfeit. 

A message will inform the consumer that the code cannot authenticate the product, allowing them to decline the item. 

Blockchain: As an industry 4.0 technology, blockchain implementation aids in storing and sharing information over an open virtual network. Its primary advantage is complete transparency, which means that all information on a specific item is accessible to all members of the supply chain network.  

Blockchain technology provides a secure and trusted tracking system from the start of the supply chain to the end. Blockchain anti-counterfeit solution supports the initiative against counterfeiting by identifying the provenance (i.e., proof-of-origin) of a product. When integrated with IoT, it can be the best possible anti-counterfeiting technology in this age. Thanks to Blockchain’s ability to identify provenance, Legal enforcement agencies can now establish the counterfeit nature of products. 

Companies use smart tags to implement a blockchain solution- provenance identification, which identify a product’s place of manufacture, track its location, and assign other relevant information to it at each stage of the supply chain. QR Codes, RFID Tags, and Signatures on Metallic or Ceramic Surfaces are all examples of smart tags. When a user attaches a smart tag to a product, the smart tag sends data to the Blockchain for each new transaction, along with immutable time stamps. As a result, a supply chain partner can trace a product back through the supply chain to see where and when it was created at any point along the way.  
Invisible cryptography signatures: These are signatures that are not visible and can be included in any package. They are difficult to notice unless you have a smartphone equipped with a legitimate API capable of recognizing the encrypted signature and determining whether the product is authentic, making them impossible to counterfeit.  

In addition, unlike real holograms, which are typically passed on, there is no chance of them sliding off the box. Furthermore, they do not necessitate changes to the packaging design, materials, or manufacturing process, saving time and money. 

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