Counterfeit Detection at Scale
Changes Challenges Choices
  • The sale of counterfeit and pirate goods will continue to grow, including in the online domain
  • The use of NFTs to provide a proof of  ownership for digital assets is gaining momentum
  • We expect there will be a need for an easy-to-adopt mass market solution (similar to NFTs) to prove the authenticity of physical goods
  • Solutions may not be easy to adopt, placing too high a burden on consumers and/or merchants
  • There is still uncertainty over the long-term use case for digital media being sold as NFTs
  • What is the impact of counterfeit and pirate goods sales on your business? 
  • Should you build your own solution to guaranty the authenticity of what you sell, partner with others, or join an existing platform?

Increasingly consumers want to be sure about the authenticity of the goods they purchase, while brands are wary of merchants selling counterfeit versions of their products. Counterfeit detection is increasingly needed in this day and age.

Large corporations have built blockchain-based solutions[1] to protect their brand and revenues.  However,  these individual solutions are technology, infrastructure, and resource-intensive.  

 

The counterfeit goods explosion 

Trade of counterfeit goods is on the increase and this is impacting merchants in OECD countries  and governments of non-OECD countries as this trillion euro trade also leads to job losses and tax evasion[2].

Some countries have dedicated markets and manufacturing units focussed on producing and exporting counterfeit goods[3]. Traditionally, these practices have thrived on the cash economy. However, with the shift towards online shopping and the surge in the popularity and adoption of online marketplaces,  most of this trade in counterfeit goods is moving to third-party seller systems on these marketplaces[4]. 

 Luxury goods are the most targeted product category.  Global luxury brands have made several attempts to enforce anti-counterfeiting legal actions across the globe, but these have not been able to curb counterfeit activities. Brands like LVMH, Prada, and Richemont have  partnered to build the Aura Blockchain Consortium to fight counterfeit goods[5]. 

The solution built by this consortium will match a Product ID against a Client ID to validate the  product's authenticity. This will also enable consumers to access trusted data about the entire lifecycle of a product, with no need for third-party verification. This is a significant step towards counterfeit prevention and detection. 

The solution is similar to the token-based infrastructure that Worldline already uses today to store card data securely so consumers can reuse them for payments at known merchants. A similar token-based system could provide a simplified mass-market counterfeit detection solution for all brands[6].


Worldline’s traceability solution

Worldline has over a decade of expertise in developing traceability solutions. We have been one of the first companies to implement comprehensive product traceability systems between the private and public sectors to combat illicit trade in all its forms[7]. We have already built traceability solutions for our merchants to offer their consumers the  ability to track the origin of products like tobacco and salmon. 

 

Security

The rise of NFTs

 Recently, the market for ownership rights to digital art, ephemera and media (known as NFTs), has exploded. NFT is an abbreviation for Non-Fungible Token, a unique digital identifier that cannot be copied, substituted, or subdivided, and is recorded in a ledger like the blockchain.

What is still not certain is whether there will be a long-term use case for all digital media currently sold as NFTs. They are easy-to-replicate products that might be pirated easily. Nonetheless, there seem to be promising use cases around collectables (first tweet, source code of the first website, etc.) and music that might drive the future of NFTs. Here NFTs provide a simple proof-of-ownership tracking token of a public/open-source digital media.

 

NFTs cross-over from digital to physical

Given that:

  • There is an emerging need for a mass-market token-based solution on the blockchain for counterfeit detection
  • NFTs have already been used for the same purpose but instead for digital media only

Could we soon see the use of NFTs for physical goods?  

More chapters about Implicit Trust from Regulations

Governmental Priorities

Governments will increase their focus on sustainability, protecting citizens and businesses, securing sovereignty and stimulating innovation. This will require businesses to adapt to new standards, opening up more systems and sharing more data.

Learn more about Governmental Priorities ›

Privacy

With people’s lives being increasingly online and digital, security and privacy of their personal information will need to be guaranteed cost-effectively without harming the end-user experience.

Learn more about Privacy ›

The Data Economy

The arrival of the data economy is being enabled by new regulations and technologies and will bring opportunities for businesses that understand how to share and leverage data.

Learn more about The Data Economy ›

More resources

Worldline’s expertise in traceability solutions has been developed for over a decade and one of our focus domains is digital tax verification and product traceability. We help our clients to combat illicit trade, optimise their supply chains and create closer customer intimacy. We have successfully implemented effective traceability solutions across several industries in many countries. 
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Worldline teams up with Microsoft to futureproof online businesses against fraud










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