In Africa and other developing regions where informal trade is strong, brands are increasingly facing the challenge of counterfeit products. Worldwide, the US Chamber of Commerce’s Global Intellectual Property Centre estimates cross-border trade in physical counterfeits alone costs the global economy a staggering US$250bn a year.
One company using mobile phones in an effort to combat this is Netherlands-based technology brand, Philips.
Towards the end of 2014, Philips piloted an SMS platform in Kenya where consumers can SMS the serial number of a lighting product they plan to buy (such as light bulbs) and receive immediate feedback as to whether it is a genuine Philips product or a fake.
JJ van Dongen, who heads Philips’s business across the continent, told How we made it in Africa that the trial has proven successful and the company is now rolling the programme out across the continent. In addition, they plan to include several other products offered by Philips.
‘Educate, protect consumers’
The programme is part of their ‘Buy Original’ campaign which aims to educate and protect consumers against counterfeit products. Van Dongen explained the platform makes sense in a region where consumers have strong access to mobile phone technology and are becoming increasingly savvy with their purchases.
“Like many global brands, we are impacted by fake products… and obviously our high performing products, like dry irons, are very susceptible to faking, and so is lighting.”
He added in some countries over 50% of light bulbs are actually fakes.
Philips has also introduced hologram security stickers (for lamps) and all their lighting products come with a unique 16-digit validation code to better enable consumers to identify originals. An “original” brand sticker also aims to authenticate products.
Fakes a challenge for all brands
According to Van Dongen, the African market has become “extremely competitive” for brands such as Philips, with a strong influx of products from China, Japan and Korea. However, price sensitivity amongst African consumers is still a reality, and cheap knock-offs pose a threat to brands.
In addition to poorer product performance that could mean consumers pay more in the long run, Philips argues that fake products also pose a risk to consumers as they haven’t undergone the rigorous testing of certified products. For example, an electrical malfunction could result in a fire.
“We need to educate the consumer and also work with various authorities to combat fakes. And we are focusing on how to make genuine products identifiable,” concluded Van Dongen.