Maintaining brand control through 2D barcode

IN Asia, counterfeits are one of the biggest problems today for brand owners, as they directly eat away significant sales volumes from the market.

Counterfeit producers also take shortcuts in product quality and safety, causing health dangers for consumers.

If counterfeits are not well curbed, market incidents with these counterfeits will also damage trust and reputation of the original brand owner.

In Asia, counterfeits are rampant and government interventions not always effective, so what can be done by brand owners?

Conventionally, manufacturers apply batch coding. In batch coding, for every production batch a unique number is printed on the product packaging as well as secondary packaging on a carton box or plastic crate.

This allows factory itself to trace a product batch from the source, such as where it is manufactured, what day and in which batch and what ingredients used in this batch.

In this way, upstream tracing of a batch, towards the primal producer is theoretically possible.

In practice, however, it is not that easy due to the mixing of ingredients by suppliers, which makes it still difficult to identify and isolate the exact source.

A far bigger challenge, in my opinion, is where did my products actually end up in the market place: tracking where the product is in the market.

The consumer buys a product at a retail outlet. With a credit card payment or bonus card, the retail outlet would actually be able to link a product to a customer, but this product identification at point of sales scanning does not scan the batch number of the individual product sold.

Therefore, there is no match created between the customer and the actual production batch. But retailers are not keen on sharing detailed sales data with their supply chains.

Another problem is that some traders buy big volumes from a producer, but without the knowledge of the brand owner, these products do not enter the local market but instead are exported to another country.

In this way, markets are cannibalised with original products but with possible different product specification and pricing.

Then what would be an ideal scenario? Each product has a unique identification and is then linked to the consumer that bought it.

Using security labels with two-dimensional (2D) barcode and tamper indication or advanced security print can best control counterfeiting and fraud.

Each label is given a unique 2D barcode, which can be used to identify the exact product from source.

Through scanning by the consumer, the brand owner can identify the location of the product in the market.

The tracking of a consumer product is extremely valuable to the brand owner as the brand owner now knows where his products are geographically and has identified the actual consumer. The trick is how to get the consumer to identify himself with this product by scanning it.

So, what is the value to the consumer? By scanning the 2D code, the consumer can validate the originality of the product and know the product characteristics, such as halal certificates, and how to use the product.

In order to attract the consumer to scan the 2D barcode, they could play a game, win a price, obtain discount, participate in a special promotion, and many more.

The writer is founder and CEO of LBB International, the logistics consulting and research firm that specialises in agri-food supply chains, industrial logistics and thirdparty logistics. LBB provides logistics diagnostics, supply chain design and solutions and market research in Asia, Europe and the Middle East.