Why Should Brands Fight Against Counterfeiting?
Brands targeted by counterfeiters face not only a loss of revenue but also a loss of reputation. Fake products can result in negative experiences for consumers. Research indicates that after a bad experience, 72% of customers might shift to a different brand.
With the changing consumer habits of today, the role of the Internet in shopping is increasing every day, and this situation inevitably becomes an opportunity for counterfeiters. Brands targeted by counterfeiters face not only a loss of revenue but also a loss of reputation. Fake products can result in negative experiences for consumers. Research indicates that after a bad experience, 72% of customers might shift to a different brand.
The reputational damage caused to brands due to the harm counterfeiting inflicts on society, the environment, and individuals can be categorized under four main headings: economic, legal, ethical, and social.
Economic
The presence of counterfeit products in the market can diminish your capacity to sell genuine products and the potential to reach consumers. Due to their lower prices, counterfeiters may seem attractive to consumers, negatively impacting your sales and profits. To illustrate the magnitude of revenue loss in businesses due to counterfeiting, referring to studies conducted in Europe, we can say that this loss for brands is approximately 83 billion Euros.
If brands do not combat counterfeiting, their financial losses will continue to grow.
Legal
Counterfeiting causes legal harm to brands as well. It has been observed that counterfeit product sellers are occasionally connected with organized crime, and there have even been recorded cases linked to terrorist groups. When these sellers commit crimes under the banner of your brand's logo, it can leave a negative impact on your brand. Therefore, taking a stand against counterfeiting is a responsibility that must be undertaken to protect brand reputation.
Ethical
Counterfeiting often leads to unethical working conditions and human rights violations. For instance, the adverse conditions and risks faced by workers in counterfeit product manufacturing facilities are manifestations of this. As highlighted by a fire outbreak in a counterfeit product facility in Spain, such situations can endanger human lives in some cases. The working conditions in China, where many counterfeit products are produced, are often far from hygiene and occupational safety standards.
Social
Brands should play a leading and pioneering role in society. Therefore, the measures taken against counterfeiting can be seen as a responsibility of brands to protect the health and safety of the community.
Especially when products that directly endanger human lives, like counterfeit drugs, are involved, serious measures are essential. To underscore the seriousness of this issue, according to a study by the World Health Organization, over 500,000 children die each year due to the use of counterfeit drugs.
In the digital age we're in, brand protection is crucial for a brand to safeguard its reputation, the trust of its customers, and its profits. With the shift in consumer habits towards online sales channels due to the pandemic, there has been an increase in counterfeit product sales, posing various risks for brands. To counteract this, the implementation of effective brand protection strategies has become essential.
In conclusion, brand protection in the digital age is a necessity to fully protect a brand. The 'Counterfake' Artificial Intelligence-backed innovative digital brand protection solution detects and removes counterfeit products sold online. It operates like an anti-virus program for brands, ensuring counterfeiters get no foothold.