AI and anticounterfeiting
Private companies and public entities are using AI to identify counterfeits more quickly than humans can, and, given the increased volume of counterfeit goods traded online, this is increasingly being seen as a promising tool to fight fraudsters.
According to Organisation for Economic Co-Operation and Development (France) data, the total value of counterfeit and pirated goods is projected at close to $3 trillion worldwide in 2022. Also, e-commerce grew from 10% of retail sales to more than 30% during the COVID-19 pandemic, boosting the ability of those producing and selling counterfeit goods to reach consumers.
This is a threat to brands in two ways: If consumers buy inferior-quality fake goods assuming that they are genuine, the original brand risks a decline in brand loyalty. If the fake goods are close copies of original branded goods, but sufficiently discounted for customers to realise they are purchasing a replica—again the original brand may lose customers.
The sale of counterfeit goods online is exacerbating the problem. For one, customers are hard-pressed to identify inferior quality goods from website images. Legitimate webpages, images of items, and product details are easily copied, and the sheer scale of the e-commerce market in counterfeits has made prevention and enforcement increasingly difficult.
Consequently, brands, online markets, and enforcement operations, including Customs, are turning to technology for more effective anticounterfeiting measures.
AI is becoming the go-to solution for uncovering counterfeit goods and operators, and new tools and technologies are constantly being developed to identify counterfeits and close copies (not strictly counterfeit as they are not claiming to be branded goods), and to provide digital provenance of physical goods, to enable trackable validation of original brands and tradeable collectibles.
Platforms and alliances
The big e-commerce marketplaces have developed resources to help brands fight counterfeiters. The business rationale is clear: they need to retain credibility; and adding brand protection keeps the big brands on their platforms.
In 2017, Chinese e-commerce giant Alibaba, along with 20 large international brands, created the Big Data Anti-Counterfeiting Alliance—identifying counterfeit listings by applying sophisticated AI technology to large volumes of product listings and customer reviews.
By 2021, there were 193 members of the Alibaba Anti-Counterfeiting Alliance (AACA) protecting over 700 brands through the programme (up from 500 in 2020). Geographically, members are headquartered in 19 countries, with 34% originating from Europe, 29% from the United States, 24% from China, and 13% from elsewhere in the Asia-Pacific region, according to Alibaba’s 2020 IP Rights Protection Report.
