Counterfeit Products: A concern for Asian Manufacturers

Tags: manufacturing, supply chain

Consumers around the world are feeling the effects of the global slowdown which has resulted to unemployment, job uncertainties, and credit reductions. Consequently, the market for counterfeit products has been growing as more consumers are purchasing them to satisfy their status needs.

Findings from a recent consumer survey conducted by Villanova School of Business in five countries including Brazil, China, India, Russia, and the US in the area of fake products revealed some startling results. 2000 consumers were interviewed in the survey and the results showed that:

• One-third of the interviewees reported a high level of complicity with counterfeit products
• Two-thirds of the interviewees reported some level of complicity with counterfeit products: They willingly obtained, shared or used a counterfeit product
• Although the emerging markets are where counterfeit products are most likely to be purchased, consumers in developed countries are also willing to purchase them

As anti-counterfeiting campaigns in the US would be very different from campaigns in India or China, the study recommended that companies should respond by developing anti-counterfeiting strategies that target specific countries. Although the study made this recommendation, it also pointed out that it will be very costly and complex to develop strategies that are specifically tailored for individual countries.

For manufacturers, this growing problem can be addressed in two specific ways: The first is to take preventative measures and the second, to understand the scale of the problem.

A tighter control of distributors and dealerships is an example of a preventative measure; manufacturers have to put in place processes and systems to monitor sales so as to reduce the chance of fake goods being sold as a replacement for original parts.

To understand the scale of the problem, manufacturers would have to keep track of its intellectual property; maintain a close watch on their competitors to ascertain if they infringing on their intellectual property rights; and, work with supply chain partners to ensure there they are not working "extra shifts" to  produce parts that will later on be sold in the black market.

As Asian markets mature, we will see more and more focus being placed on the removal of counterfeit products as manufacturers seek out opportunities to increase revenues.