Will QR codes put an end to counterfeit goods sold online?

Discussion
May 22, 2015

These days QR codes are often regarded as a marketing fad of debatable usefulness and are sometimes even subject to mockery. (A well-known Tumblr page titled "Pictures of People Scanning QR-codes" features only the message, "No posts yet.") Alibaba, however, may have found a good use for the much-maligned configurations of squares, one the e-tailing giant hopes will help put an end to the pervasive problem of counterfeit goods being sold on its marketplace in China.

Alibaba has partnered with Visualead, creators of a more graphically appealing type of QR code called a dotless visual code, which can feature an image (or advertisement) while retaining its scanability. Alibaba is using these codes as the basis for its new tool, called "Blue Stars." The tool prints out individual dotless visual code labels meant to be affixed to packages as unique identifiers of the products inside.

Alibaba is partnering with brands like L’Oreal to apply the codes directly to products. When a customer orders a product made by L’Oreal through a merchant listed on Alibaba and receives the product, she can scan the code using Alibaba’s Taobao shopping app. The app will display a virtual certificate of the product’s authenticity. Other product information, including advertisements and promotions, can also be made to appear on-screen when a code is scanned.

[Image: Visualead]

The manufacturer can also track its own codes to monitor if they have been scanned by consumers and how many times. If someone attempts to create a duplicate of an original code, the manufacturer can receive information about the location of the attempted counterfeiter.

CNN Money reported that L’Oreal and other brands have already created millions of the labels for products sold in China.

Alibaba is currently allowing partnering companies to use the tool for free, according to Tech in Asia, thus they will be able to sell products with confirmed-authentic dotless visual codes even at non-Alibaba outlets.

Merchants will not, it appears, be empowered by the technology to go after counterfeiters if and when false products are scanned. Further, it is yet to be seen if customers will actually scan the codes and how useful the codes will be in stopping customers from intentionally purchasing cheap knockoffs of brand-name goods.

Do you see potential in the use of visual dotless QR codes to stem the flow of counterfeit goods from Alibaba and other online marketplaces? Are there other ways brands can work with online marketplace operators to address the sale of counterfeit goods?

Braintrust
"Dotless QR codes may allow the executive at Alibaba to claim that they are combating counterfeiters, but I can’t see many consumers taking the time to check an order once it is received and then taking more time to return the order to the same counterfeiter if it’s fake."
"I’m confused. A decade ago that’s what RFID was going to do — address the provenance of merchandise being sold. It actually would have worked for that purpose. Now dotless QR codes? I don’t get it. Pick a modality, any modality. The challenge is to actually DO it."
"Possibly, but even the article raises three hurdles to overcome: 1. Merchants will not be empowered by the technology to go after counterfeiters if and when false products are scanned, 2. it is yet to be seen if customers will actually scan the codes and 3. it is yet to be seen how useful the codes will be in stopping customers from intentionally purchasing cheap knockoffs of brand-name goods."

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9 Comments on "Will QR codes put an end to counterfeit goods sold online?"

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Max Goldberg
Guest
2 years 6 months ago

Dotless QR codes may allow the executive at Alibaba to claim that they are combating counterfeiters, but I can’t see many consumers taking the time to check an order once it is received and then taking more time to return the order to the same counterfeiter if it’s fake. Alibaba needs to step up its efforts to combat the rampant counterfeiting that pervades its sites. Putting the onus on manufacturers is not the answer.

Paula Rosenblum
Guest
2 years 6 months ago

I’m confused. A decade ago that’s what RFID was going to do — address the provenance of merchandise being sold. It actually would have worked for that purpose.

Now dotless QR codes? I don’t get it. Pick a modality, any modality. The challenge is to actually DO it.

Chris Petersen, PhD.
Guest
2 years 6 months ago

Counterfeit is theft. Anything that can help reduce the probability of it happening is good for the consumer and authentic retailers.

But any code or mechanism that has been devised by someone has been broken by someone else. We need to see a lot more trials and testing before declaring it a foolproof solution.

At least the Visualead new dotless QR codes are a great first step in addressing the counterfeit problem in e-commerce.

Bill Davis
Guest
2 years 6 months ago

Possibly, but even the article raises three hurdles to overcome: 1. Merchants will not be empowered by the technology to go after counterfeiters if and when false products are scanned, 2. it is yet to be seen if customers will actually scan the codes and 3. it is yet to be seen how useful the codes will be in stopping customers from intentionally purchasing cheap knockoffs of brand-name goods.

The issue of counterfeit goods is a significant one for a marketplace like Alibaba as it can adversely impact their business so they have to look for ways to proactively address the issue. For the majority of retailers this isn’t an issue, so while Visualead has advanced the QR code, I still think QR codes are “a marketing fad of debatable usefulness.”

Peter Charness
Guest
2 years 6 months ago

About 30 seconds after these appear in bulk, someone will produce a counterfeit dotless QR code.

Dan Frechtling
Guest
2 years 6 months ago

The last sentence says it all: “it is yet to be seen if customers will actually scan the codes and how useful the codes will be in stopping customers from intentionally purchasing cheap knockoffs.” Predictions:

  1. Consumers won’t scan codes. They may be more visually pleasing, but not more obvious. Will a consumer scan a QR code because it’s pretty?
  2. Shoppers will continue to purchase counterfeit items as long as they are available. Justifications like, “it says it’s a replica, not a counterfeit” will only increase.
  3. Neither Alibaba nor manufacturers will seriously go after perpetrators. Alibaba has significant revenue at stake. Manufacturers will request that Alibaba act, but are barred from going after counterfeiters when false products are scanned.

This is outstanding PR and investment. Having CNN Money to headline counterfeit as a “virus” justifies taking years to eradicate it. Now that Alibaba has a stake in Visualead it can advertise anti-counterfeit steps and realize capital appreciation. Brilliant.

W. Frank Dell II
Guest
2 years 6 months ago

Interesting idea, but two weaknesses exist. First, how easy will it be for counterfeiters to duplicate the QR symbol? Second, will customers scan the product? Training the consumer is the hard part. Another approach is to only accept manufacturer-certified distributors to sell the merchandise. Unless the manufacturers says this is a certified distributor for this UPC the transaction should not be completed. The customer could be told the merchandise is likely counterfeit and asked if they still want to make the purchase.

John OBrien
Guest
John OBrien
2 years 6 months ago

Alibaba will issue the codes as labels, presumably to the same merchants they have selling products today (some of which are counterfeiters).

All this system does is tell you if the code/label is authentic, not the product it gets attached to. What happens when a product sold with the code attached is actually counterfeit, but Alibaba confirms it is authentic? Who guarantees authenticity (and is liable)?

Great PR move, and as Dan points out, good for their investment in this technology company too. A solution to counterfeits, not so much.

Gajendra Ratnavel
Guest
2 years 6 months ago

Not convinced of this idea to curb counterfeiting. However, if they can use counterfeiting as an incentive to get customers to use it, then it’s a great tool for their partners to keep track of their products.

wpDiscuz
Braintrust
"Dotless QR codes may allow the executive at Alibaba to claim that they are combating counterfeiters, but I can’t see many consumers taking the time to check an order once it is received and then taking more time to return the order to the same counterfeiter if it’s fake."
"I’m confused. A decade ago that’s what RFID was going to do — address the provenance of merchandise being sold. It actually would have worked for that purpose. Now dotless QR codes? I don’t get it. Pick a modality, any modality. The challenge is to actually DO it."
"Possibly, but even the article raises three hurdles to overcome: 1. Merchants will not be empowered by the technology to go after counterfeiters if and when false products are scanned, 2. it is yet to be seen if customers will actually scan the codes and 3. it is yet to be seen how useful the codes will be in stopping customers from intentionally purchasing cheap knockoffs of brand-name goods."

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