China Leading the Way in Global Counterfeit Production

2019-02-15 13:18:19

Chinese Based Counterfeiting: simplyBrand has Experience at the Source

At simplyBrand we have been involved with big data and social listening in China for many years. Our clients span the globe and include many brands that you regularly use. That experience is what lead us into our latest venture: combining our AI with blockchain technology and crowd-sourcing to end counterfeiting on global E-commerce. The epicenter of that problem being here in China.

Don’t get us wrong, we love China! We are based here and many of the team members are Chinese. However, there is a darker side to all of the wonder that exists in this beautiful country, and it counterfeiting. EUROPOL estimates that 72% of counterfeit products currently circulating in the top 3 world economies, those being the US, EU and Japan, originate in China; these counterfeit products coming out of China are costing non-Chinese firms to lose over 20 billion USD per year.

Not only are foreign firms losing profits and market share, they are also losing their image among customers that are dissatisfied with them being unable to keep distribution channels clean of counterfeit products. Spending hundreds of dollars on a new pair of shoes only to have them fall apart after a month is extremely frustrating, and consumers that have experienced such are looking to brands to better protect them against this thievery.

These levels of counterfeit production are growing every year in response to the increase in global E-commerce as consumers hunger for cheaper products from overseas. By 2020, about half of all digital commerce purchases will be across borders, with North America and Western Europe ranking second and third for all such purchases[1]. This increase in online shopping will open the floodgates of counterfeiting, and with China currently producing 80% of the world’s counterfeits[2], production here will only increase.

Within China itself authorities are hard pressed to stop this industry, not only because of the cultural normalization of counterfeiting in this developing economy, but also because of its’ profitability: a full 8% of China’s GDP is based on counterfeit goods[3].

Yet for all of this money, both lost and gained, the ultimate cost of counterfeiting is life, itself. Counterfeit products are made in sweatshops by people, often children, existing in slave-like conditions. Such conditions were witnessed firsthand by author Dana Thomas who recounts the appalling conditions she witnessed in a counterfeit sweatshop in Southern China:

“No one utters a word, not a sound, as I recall the raid I went on with Chinese police in a tenement in Guangzhou and what we discovered when we walked in: two dozen sad, tired, dirty children, ages 8 to 14, making fake Dunhill, Versace, and Hugo Boss handbags on old, rusty sewing machines. It was like something out of Dickens, Oliver Twist in the 21st century.”[4]

Suffice it to say, people are suffering in ways you cannot possibly imagine to create a 50USD version of that 10,000USD Hermes bag you’ve had your eye on; the savings are huge, but are they worth the life of a child?

No.

We believe, we know, counterfeit products are not worth the sanity, health or life of any single person. But that is their cost. It’s fun for us to save a few bucks on designer goods, but it’s not fun for the slave or indentured servant that sewed the garment, stitched the shoe or pressed the DVD. It’s dehumanizing, horrifying and incomprehensible to us that exist outside of that world.

That is why we at simplyBrand have decided to pool our current AI resources, while bringing blockchain and real people into the fold, to clean up digital commerce by identifying all possible counterfeit products. Our system includes people working in tandem with our sophisticated AI program to identify counterfeit products, while also using their input to further train our AI and advance its’ capabilities. These people will be rewarded through our blockchain with tokens, and on that very same blockchain we will publish a blacklist of counterfeit product retailers so that all consumers may become better informed about their purchases and brands can understand more about how and where their products are being counterfeited.

By working together with the latest technologies, we can fight counterfeiting in global digital commerce and begin to bring about an end to an industry built on trading life for profits.

To learn more about how we can work together to fight counterfeiting on digital commerce, join us on Telegram at t.me/simplyBrand

Visit us online at simplyBrand.io

Contact us directly at contact@simplyBrand.io.