Cosmetic Counterfeiting

Kyle Parker wrote the scourge of

counterfeiting which according to her has reached epidemic proportions

Companies that operate within the cosmetics industry are painfully aware of the cost of counterfeiting.

It seems that the bigger the

brand awareness, the greater the chances are

that the brand will be counterfeited. Security

organisations and governments dealing in

policing counterfeited products have

subsequently turned their focus away from

consumer education and now are focusing on

the laws that govern anti-counterfeiting

measures. Consumers, particularly in Africa,

are not informed adequately, when faced with

counterfeited products. With organised crime

rings scattered throughout the continent,

policing consumers is all but become

impossible.

“The counterfeiters tend to target big-selling

brands, with Perry Ellis, Dolce & Gabbana,

Calvin Klein, and Davidoff among the

manufacturers affected by the criminal

activity. Counterfeiting of premium brands is

expected to strengthen over the coming

years.” – Technavio analyst Brijesh Kumar

Choubey

So how do existing laws help stop cosmetic

counterfeiting in Africa? According to Spoor &

Fisher, the Counterfeit Goods Acts of most

African countries set out to streamline and

create effective enforcement measures to

enable owners of trademarks, copyrights and

marks protected to take action against the

counterfeiting of their products.

In an essence, the majority of African

countries have strengthened laws and

empowered enforcement agencies to search,

seize and prosecute with little interference red

tape. However, a simple glance over to the

atlas, the sheer size of Africa and the

numbers of enforcement agents, leaves a

glaring hole of opportunity for criminal

organisations.

“Beauty products are meant to enhance your

features. However, the fakes can, in fact, do

quite the opposite. Our general rule is: if it

seems too good to be true then it probably

is.” – Det Supt Maria Woodall, Police

Intellectual Property Crime Unit (PIPCU)

Like a bad rash, the problem persists and is

showing growth. If companies are stuck

between a mass of ill-informed consumers and

under-resourced enforcement agencies, who

or what solution can we look next, to bring

this scourge under control?

Security packaging – our knight in shining

armour?

Adding security measures through print,

labelling and tracking solutions have been

around for many years. The underlying

problem with these solutions is exactly that,

they exist. Organised crime is watching and

duplicating with impeccable skill.

A dermatologist recently told the Fox

broadcasting network. “Fakes cosmetics could

cause acne on your face, dermatitis or

eczema or scaling. Theoretically, you can

absorb (them) through your skin too. There

could be bacteria because there is no quality

control. Anything could be in there.”

Syndicates are no longer those 4 burly guys

sitting in a sedan skowering the streets for

unsuspecting victims. Crime syndicates are

corporations, sophisticated networks of

hackers, informants and undercover agents,

infiltrating pharmaceutical markets worldwide.

Like spy-vs-spy, companies are consistently

embraced in this battled of who to trust and

who to fight.

What if there was a solution that eliminated

human interference, with technology that

cannot be replicated, a kind of unhackable

security packaging 2.0?

The PeltaTM technology is based on the

standard 2D code but extends the capability

of the 2D code by adding a second layer of

information. The second layer is hidden and

invisible to the standard 2D code reader. The

covert layer can only be decrypted by using a

custom key, thus can be used as a basis of an

authentication or track and trace solution. The

licensee of PeltaTM can use the custom

software for internal use and consumers may

make use of a scanner application on their

smartphone to authenticate the document or

product.

The overt layer of information is read

identically to standard 2D codes (i.e. QR, Data

Matrix, Aztec, Maxicode, DotCode and others).

This first layer of information is easily

accessible and includes logistical or marketing

information, easily read by scanner

applications on a smartphone.

Pelta™ coding has proven successful in

eliminating fraud in Countries worldwide. The

results are promising and more can be done

to turn the tide of counterfeiting.

Kyles quote

At some point, the cost of the solution is

nothing compared to the loss a brand can

incur when damage is done or lives are lost.

Brands have to act or they show that they

actually don’t care about fakes unless it

impacts them financially enough to act.

False profiting

According to Interpol, profits made from

counterfeit cosmetics are used to fund drugs

smuggling and terrorism. For this is the

shocking flipside to the shadowy world of

counterfeit cosmetics.

The cheaper imitations that are flooding the

market may look legitimate — as well as

please the purse — but they have been found

to contain ingredients that in the worst cases,

cause permanent damage to both the body

and the brain.

There is no immediate solution to the scourge

of counterfeiting. The positive spin is the

overall commitment by pharmaceutical

companies is to enlist support and measures

to reduce the impact. From revenue to life

loss, counterfeiting is now at epidemic

proportions.

Pagemark Africa is the African based supplier

of software technologies. With a patent

approved authentication technology called

Pelta™, Pagemark Africa provides

governments and international companies with

secure printing solutions, product and

document authentication, serialisation

solutions, and track and trace software.

Many recent innovations are based on the

core technology Pelta™ which is a software

authentication product based on 2D bar

codes. Pelta™ provides government and brand

owners a covert layer of data to utilise as

required to support their authentication or

serialisation requirements. Pagemark Africa

works with many governments and companies

across the globe and guides them toward a

common goal: secure document

authentication.

In South Africa alone, counterfeiting is

estimated to have hit over R350bn in 2011

and is growing annually.

The Pelta technology is based on the

standard 2D code, but extends the capability

of the 2D code by adding a second layer of

information. The second layer is hidden and

invisible to the standard 2D code reader.

The second layer of data is encrypted in a

proprietary format. The covert layer can only

be decrypted by the Pagemark’s mobile or

PC software using a custom key, thus can

be used as a basis of an authentication or

track and trace solution. The licencee of

Pelta can use the custom software for

internal use and consumers may make use

of a scanner application on their smartphone

to authenticate the document or product.

The overt layer of information is read

identically to standard 2D codes (i.e. QR,

Data Matrix, Aztec, Maxicode, DotCode and

others). This first layer of information is

easily accessible and includes logistical or

marketing information, easily read by

scanner applications on a smartphone.

Social media and mobile advertising have

the highest growth especially among gen-X

and Y consumers. Implementing a channel

marketing strategy that leverages these

mediums is likely to provide a good return on

investment.

Examples of covert data are:

Variable check words

External linkage information (known

by Officials only)

Lot or location information

Facility tracking codes

Pelta is used as a basis of

many Pagemark’s solutions:

Pagemark’s Track and Trace Solution

iVerifyIT – Authentication Solution

Promotional Prize Verification Solution

Easy to integrate into existing workflows:

The 2D code is quickly becoming the

standard for branding and digital messaging

in the public eye. Adding the Pelta covert

layer to an already existing workflow, means

that this new technology is likely to be easily

adopted.

Cost effective anti-counterfeit solution:

Specialised hardware is not required for this

solution to work. The Pelta code can be

printed onto products or documents by

utilising client existing printing and marking

methods.

Earning consumer trust in products and high

value documents:

End-users can authenticate the origin of

products, simply by using an application on

their smartphone.

Eliminate product fraud and false warranty

charges:

By implementing the Pelta™ solution,

products with a covert Serial Number can be

used to validate the manufacturing date and

other service information.

Enhance supply chain management and

quickly identify product diversion:

Pelta global tracking technology and

geolocation functionality allows supply chain

management and product diversion

notification.

Maintain brand control:

Brand Owners will be able to verify their

product from the cheap fakes.

Added benefit of getting to know your

customer through loyalty and reward

programmes:

Engage with your clients and get to know

the clients who are loyal to your brand. All

they need to do is scan your product each

time they make a purchase. This way you

can reward their loyalty. Additionally,

leverage social media or the internet for

marketing