It Is Time to Switch to New-Age Anti-Counterfeiting Solutions for Jewelry Brands

Protection for jewelry brands

In March 2018, the world witnessed an infamous incident of counterfeiting that rocked the Jewelry brands industry. The US Customs and Border Protection Agency seized hundreds of pieces of counterfeit designer brand jewelry coming from Hong Kong that was worth $1.4 million. The package which contained 269 jewelry pieces was confiscated in Philadelphia. The shipment included necklaces, bracelets, earrings, and diamond pendants impersonating brands like Cartier, Chanel, Bvlgari, etc.

Counterfeiting in the jewelry industry is as old as the industry itself, and thus isn’t a strange occurrence. Evidently,  ‘paste’ gemstones that were made of leaded glass, backed with foil date as far back as the 1720s. In Ancient Egypt, tombs were found inlaid with faience, an artificially dyed ceramic glass made from mineral feldspar, indicating the substitution of other precious gemstones. Colored glass fakes look so legitimate that it is hard for untrained eyes to tell the real from the fake, presenting a menace for the jewelry business.

However, counterfeiting in jewelry has found a new definition now, especially with the advent of new and modern marketplaces. There are approximately 1,000,000,000 web pages around the world that deal with watches. Around 300,000,000 pieces of watches and jewelry are put up for sale on e-commerce sites, while around 3,000,000 pieces are sold via online auctions annually.

The industry of fake jewelry is on an exponential rise – In 2017, the value of seized counterfeit jewelry and watches was $460,162,145 in the USA alone. Such incidences do not only affect customers trust in the brands, but they also do great harm to image and revenues of the companies. Cutting gemstones out of plain glass is a practice that has commonly been used in the gem trade to improve the outlook of lower quality real gemstones and to effectively raise their value. The counterfeiting process for this includes techniques like heating to lighten the stone’s color or removing unwanted secondary colors and irradiating to change the stone’s color.

Ogden, founder, and president of the Society of Jewelry Historians believes that half of the ‘antique’ gold jewelry out on the market are fake. In his view, although it is not difficult to identify them, some well-crafted knockoffs have also landed in high-end collections of auction houses and even museums. He believes that the universe of counterfeited jewelry is ever-expanding, and it has become a huge business with deep reaching interests. According to him, “Some of these items fetch hundreds and thousands of pounds. In the last 20 years, it has grown exponentially. You figure they use maybe £20,000 in raw materials, and they get maybe £200,000 on the other end.”

Why Checking Counterfeiting Matters with Jewelry Brands

Counterfeiting in jewelry or watches might not jeopardize the product’s safety, however, it does affect its quality and authenticity, as well as the honesty of the maker. Counterfeiting has a very large impact on the image of the brand. Fine items like jewelry or watches are products that are characterized by the quality of craftsmanship and originality of design. They also undermine the expected economic results of the companies who invest in design and pay to have their products patented in order to protect them from imitation.

It is shocking but true that the counterfeit industry accounts for 9% of the entire world trade. According to data, in the period between 2008-2013, IPERICO seized over items which were proven counterfeits numbering about 4.7 million individual articles which a total estimated value of 154.2 million USD. If numbers are to be believed, more than half of the counterfeit merchandise come from Southeast Asia.

Of Watches, Jewelry Brands and Counterfeiting

Just like jewelry and other luxury goods, the world of luxury watches has fallen victim to counterfeiting too. In fact, the first copy of watches can be so immaculate, it is often hard to discern them from the original. Although counterfeiting in watches has been an age-old concept, technology has catalyzed things and increased the illegal trade in manifold portions. According to a survey of 50 watch brands in 2012:

– Approximately 35% of webpages for commerce are dedicated to the illegal sale of fakes, diversions, or sub-standard imitations.

– On average, in the first 100 pages of a search engine dedicated to a specific brand of watches, as many as 32 are dedicated to counterfeits.

– 40 % of these suspicious and “dangerous” pages are hosted by American servers. There is also a sizeable presence of servers located in China, The Netherlands, Malaysia, and Germany

Finding Solutions to Prevent the Counterfeiting of Watches and Jewelry

There is no iota of doubt to the fact that the emergence of e-commerce sites and increase in the online sale of goods have helped brands grow by leaps and bounds, especially during the recent COVID-19 pandemic. At the same time, thanks to these online channels, products like luxury goods, jewelry, and watches have been facing a surge in counterfeiting, and the effects on businesses have been dire. Brands have seen a plummeting of their sales numbers, besides the battering of the image of brands.

There are several ways to prevent counterfeiting- over the years, brands have resorted to different methods to safeguard their products from counterfeiting, with blockchain emerging as one of the latest tools. Blockchain is a ledger that can record transactions, track assets, and provide transparency. Stored in blocks that are linked to each other, the data is timestamped and are largely unforgeable. This blockchain when paired with the Internet of Things (IoT) and Near Field Communication (NFC) technologies provides customers with access to a product’s entire history. This helps in determining if the said item is new or second-hand, or a fake and counterfeited one. The blockchain can also contribute to a product’s verifiable history by including the proof of purchase details that are then uploaded to the blockchain or distributed ledger.

Another simple way for jewelry makers to protect their products from the clutches of illegal traders is to make them counterfeit-proof through the use of Artificial Intelligence-powered solutions. The Cypheme Solution is the best and most useful tool when it comes to helping watches and jewelry brands fight counterfeits.

A Cypheme tag can be affixed to the packaging, giving it an identifier as unique as a human fingerprint, thus making it impossible to duplicate or copy. Before a product purchase is made, all one has to do is to simply take a picture of the tag or label on the product with the camera of their smartphone, and the artificial neural network backing the technology would tell the authenticity or otherwise of the product in less than 5 seconds. The phone authentication process can be done either through the brand’s or Cypheme’s WeChat and Facebook Messenger accounts. Each Cypheme tag can be checked as many times as needed, by anyone without damaging the packaging in any way, this means that potential customers can check the products in the shop, helping to reassure them that they are getting the real deal, and this is an important step in safeguarding or improving a brand’s image.

Cypheme label on a watch box
Cypheme label on a watch box

Additionally, the solution keeps consumers informed about the product’s characteristics, personalized marketing content can also be shared with them, and this helps in increasing their interaction with the brand’s e-commerce site. Once a picture is taken, a geolocation option is activated, and this allows the tracking of both genuine as well as counterfeit products.

The jewelry industry is in a precarious state with counterfeiters and illegal traders on an unbridled rise. With quick counterfeiting solutions available easily, jewelry and horology brands need to rethink their brand protection strategies to protect their products and build trust with customers.

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