Counterfeiting Tackled On-line By Korean Start-up Marqvision

Counterfeiting is without doubt one of the largest sources of black cash on this planet. And it does not simply have an effect on the luxurious items area. It additionally entails the manufacturing and sale of medicines and even spare components for plane! To talk about this, Visionary Marketing interviewed Emmanuel AlavoineHead of Expansion Marqvision, an American start-up that has managed to forge partnerships with the largest manufacturers in simply two years. The co-founder additionally instructed us that the startup might grow to be one of many subsequent American unicorns. Here is the transcript of our interview, recorded through the Retail expertise exhibition in Paris, of which we have been media companion.

Marqvision Tackles Counterfeiting In Marketplaces

Emmanuel Alavoine on the Tech for Retail present on November 28, 2022. Counterfeiting could be greater than 3% of world commerce in accordance with the OECDa determine that’s continually rising.

Counterfeiting: “the Biggest Economic Disaster In The World”

It is the world’s worst economic disaster. Counterfeiting even surpasses the organized crime of prostitution, arms trafficking and drugs,” Emmanuel instructed us.

The OECD estimates in its 2020 report that the worth of counterfeiting is €300 billion per yr. “If we cumulate in consumer value, the damage is estimated at 3 trillion euros per year,” mentioned Emmanuel Alavoine.

When you consider organized crime, you instantly consider medication and prostitution. But counterfeit is price way more: 300 billion euros, the equal of Belgium’s GDP.

Counterfeiting is subsequently an actual scourge of organized crime, typically within the palms of the mafia

Counterfeiters use all of the strategies of recent commerce to revenue from the celebrity of a model they don’t personal

Counterfeiting Doesn’t Solely Have An Effect On The Luxurious Items Business

It impacts all kinds of industries and types with completely different reputations.

Indeed, one of many merchandise affected is luxurious, with manufacturers from the principle teams within the sector, French, Italian, British and Spanish. “For this sector, it is about traditionally copying iconic brands.”

But counterfeiting additionally impacts medicines, meals, hygiene, magnificence merchandise, kids’s toys, clothes and sports activities tools.

When counterfeiting harms public well being, a brand new dimension of crime is reached.

This counterfeiting additionally impacts extra superior industries resembling auto components, automotive tools and lubricants, and even plane components, instruments and industrial parts.

“In terms of value, luxury goods still represent the biggest loss compared to counterfeit products,” says Emmanuel.

These merchandise are price a number of thousand, even tens of 1000’s of euros. Counterfeit merchandise, relying on the case, are price a number of tens of euros.

In the luxurious sector, the value distinction is already very revealing. Sometimes it purchaser know what they’re doing once they purchase these counterfeit merchandise. But the overwhelming majority of counterfeit clients are in good religion and unaware of the character of those merchandise.

Counterfeiting On Marketplaces

Counterfeiting is discovered on e-commerce websites hosted by marketplaces. But it can be discovered on unbiased buying and selling websites with their very own URLs and domains.

They function with impunity till manufacturers take discover and implement authorized treatments to take away them.

Counterfeiting: A Possible Hazard To The General Public

There are a number of geographic sources of counterfeiting.

The OECD believes that 90% of counterfeit products today come from China,” explains Emmanuel. Counterfeit merchandise from China largely undergo Hong Kong.

Counterfeiting on this planet in accordance with El Pais (OECD supply) – 2017

India is one other counterfeit platform on the subject of medicines. Also price mentioning are nations resembling Turkey, Thailand, the Philippines and Indonesia.

Finally, there are the logistics resale platforms all over the world.

They cross these merchandise by lawless export hubs. And then reintroducing them in Europe, the US, Latin America or Africa.

According to El Pais, along with Hong Kong, there are additionally Singapore, the United Arab Emirates, Iran, Ukraine and Albania.

The Organized Crime Of Counterfeiting

Counterfeiting is the work of organized crime, explains Emmanuel Alavoine. “That is, the industrial sites of counterfeiting are almost comparable to the industrial sites of brands”.

They have worldwide manufacturing capabilities, high quality management, worldwide requirements, and all have logistics channels for transportation, registration, customs clearance which are an identical to the unique manufacturers.

Counterfeit business websites are just like branded websites

One Hundred Delicate Marketplaces

“There are hierarchies of more or less sensitive sites. Most of the counterfeit production, as well as its consumption, is Asian,” provides the Marqvision consultant.

But these merchandise are additionally very simply exported to Europe and the US.

No mistake in regards to the last locations of harmful counterfeit items… – Source OECD 2022

Marqvision has recognized a few hundred marketplaces which are lax to various levels and open to the resale of counterfeit items. However, in accordance with the press launch, the Korean system tracks “more than 1,500 marketplaces worldwide.”

Some of those marketplaces are well-known in Europe, resembling Wish (be aware: an American platform).

Others, notably in Southeast Asia or China, are extraordinarily delicate. They attempt to work collectively roughly overtly and dynamically to cease this motion.

Indeed, “it is worth noting that these marketplaces have an economic interest in constantly attracting traffic, while the brand has an interest in controlling its channels and customer relationships.

These are conflicting interests,” explains Emmanuel, “that is the source of the counterfeiting problem.”

What About Main Ecommerce Platforms?

“Larger portals do upstream audit work, but they are not immune to the resale of counterfeit products.”

Apart from Wish there’s alibaba.

“The celebrated Chinese platform works with Interpol, Europol and all major brands to combat counterfeiting, with varying degrees of success and results,” explains Emmanuel Alavoine.

“Alibaba has been somewhat labeled as “counterfeit” as a result of they’re a world chief in e-commerce, resulting from their mastery of the Chinese market. But their objective stays to draw extra Western manufacturers that do not present up if they do not take a proactive stance towards counterfeits,” provides Emmanuel Alavoine.

How Marqvision Fights Counterfeiting

“We have developed our own artificial intelligence system,” explains Emmanuel. “Our AI engineers are based in Seoul and are working on our algorithm.”

This algorithm makes use of two detection strategies: a) visible detection which makes use of pictures with the proper decision to check them with the originals and b) semantic detection which is predicated on the evaluation of textual content, titles, descriptions and worth.

We have been allowed to attend the demonstration on the stand of the start-up. Unfortunately, for apparent causes of confidentiality, it isn’t attainable for us to indicate the video of this demo. Here’s the simplified course of as we will summarize it from reminiscence.

The work of detecting, and particularly denouncing irregularities, is completed with the intervention of a human particular person. This alternative is voluntary and justified.

The course of may be summarized as follows:

  1. The platform mechanically detects anomalies as we described above, by picture checking and semantic evaluation,
  2. An operator verifies the outcomes by performing a visible examine,
  3. If the latter is passable, the operator will begin the complaints process. It is voluntary that the machine doesn’t perform this operation,
  4. So the system mechanically sends a elimination request by way of the usual platform type. The type is crammed in mechanically. All grievance options for documented platforms (the 1,500+ platforms talked about above) are built-in straight into the software;
  5. The operator can proceed to the following examine.

Finally, A Future Unicorn Noticed By The LVMH Group

Given the considerations of counterfeiting and its significance to the massive names in luxurious items, it isn’t shocking that Marqvision was noticed by LVMH.

The luxurious group awarded them the revolutionary start-up prize out of 1,000 candidates (class AI and information). The Korean start-up is now hosted by Station F in Paris.

DK Lee, the co-founder of the hardly two-year-old $25 million startup, instructed Visionary Marketing that Marqvision was more likely to be a unicorn quickly.

If one can choose the significance of a B2B resolution by the magnitude of the issue it solves, one won’t be stunned by this prediction.

Read the OECD report on counterfeiting

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