Anti-Counterfeiting, e-Commerce and the Export Market Consumer Building the Framework Presenter: Hollis Ashman University of Melbourne On behalf of Melindee Hastie
Research Streams
Agenda • Dealing with RISK Assessing Category Risk against a Database for Anti Counterfeiting • Consumer PERCEPTION Validating the Impact of Anti Counterfeiting through e-Commerce • Building an adaptive STRATEGY OF OPTIONS A Strategy Map for Anti Counterfeiting
Background • Counterfeited products increasing risks to Chinese health and safety. • Escalating demand for Anti- Counterfeit Packaging & Tracking Technology (ACP). • Market expected to reach US $62.5 billion globally by 2020. • Asia Pacific region projected as fastest growing area (estimated. CAGR of 18.1%, 2015 to Source. www.alliedmarketresearch.com 2020).
• Channel News Asia ( Feb. 2014) – 1,200 tons of counterfeit and substandard foods – 430,000 litres of counterfeit beverages seized across 33 countries. – Oil, vinegar, biscuits, and chocolate bars to fake spices, condiments and substandard dairy products. • Wine industry experts estimate 20% of wine bottles sold worldwide are counterfeit. • In 2013, the Chinese Ministry of Public Security reported that the counterfeit products seized and destroyed included: Source: “China police crack down on – Food and beverages 5,000 tonnes. counterfeit goods,” Channel News Asia, August 10, 2013. – Drugs and tablets 2 billion tonnes. – Pesticides, fertilisers & agricultural seeds 3,100 tonnes. – Personal care products, machinery and electrical products 53 million tonnes .
The Project BUILDING THE FRAMEWORK TESTING THE FRAMEWORK Technology Review via Test Framework with ID Present Present key SME’s and Effectiveness Technologies Suppliers Index for bundle options ID Ease of Use ID Key Gaps ID Key Review IP Technology Factors that Database - Future Define Build Virtual Anti C Tech Effectiveness Anti Counterfeiting Prototypes Test with Consumers Market Impact ID Potential Market Value for C-feiting ID Key Design Parameters for Authenticity
Review of 10.000 Anti-Counterfeiting Patents Effectiveness Factors: • Can’t be Duplicated • Dynamic • Dependable • Single use • Covert • Overt • Remote
Anti-Counterfeiting Packaging Search Cost Level/ What's the Who Needs Substrate Complexity problem you Chain Result Information Impact are solving RFID Cost: Effectiveness: Producer Shelf Stable, Flex, plastic Bar Coding Low Low Consumer Chilled, films Medium Medium Holograms Shopper Frozen, Ridged plastic High High Inks Exporter Ecommerce, Carton board Electronic Retailer Direct export Paper Features: Complexity: ….. Physical Corrugated Can’t be Duplicated Low … board Dynamic Medium Foils Dependable High Single use Metal/ Tins Covert Glass Overt Remote Freedom to operate? …… Food Category Market issues? ( Cherries, Coffee, Bacon, etc.) e.g. shelf life for counties with limited refrigeration Brand Value/ Geography Category
Search Database for Present Factors Technology that Fits of choice The database search shows us what present technology fits against the factors of choice. Technology that fits
Developing a Tailored Brief for what an SMS wants to achieve • Overall Questions Test – How prevalent is A/C for your category ? Framework with key SME’s – What A/C efforts have you used in the past ? and Suppliers – What was the outcome ? – What do you do now ? What are you considering ? – How do you see the value and the impact for your business? • Impact on Sales ? • Impact on Brand reputation ? • Impact on Insurance ? • Who should pay for it? (Producer, Retailer, Consumer) ID Ease of Use ID Key Gaps – If A/C is not used , why? (i.e. what barriers are there to use?) • Additional Questions – Level of interest in export? – Looking at creating New Brand or Using Present Brands? – Do they want to own the solution or have a 3 rd party provider?
Anti-Counterfeiting, e-Commerce and the Export Market Consumer Testing the Framework Caroline Francis University of Melbourne
• Counterfeiting - Global industry est. 1.7 trillion US dollars. • Counterfeit goods flourish through online platforms such as Alibaba, Taobao & Tmall Global. • According to China Daily, regulators inspected over 29,000 e-commerce websites and deleted over 7.14 million illegally- listed items in 2012 alone. • Emerging businesses find their brands pre-claimed or modified http://www.businessinsider.com.au/ in the first-in-first-served legal system.
• Hard to distinguish between real and fake. • Traditional Shopping Cues Lost making judgment difficult. • Chinese e-Trust is damaged consumers on high alert.
Millennial Chinese e-consumers are tech savvy and willing to research and engage companies on a more intimate level to assess risk prior to purchase
THE ELEMENTS OF TRUST • Rousseau et al. (1998) Intention to accept Vulnerability • Taddeo (2009) Risky Investment • Luhmann (1979) Familiarity, Expectation, Risk-taking • Deutsch (1960) Relationship of Mutual Trust • Doney, Cannon (1997) Exchange partners Credibility • McKnight et al. (1998) Initial Trust - trustor having little to no knowledge of the trustee eg. Emerging businesses. • Siau and Shen (2003) e-Trust - hard to obtain, extremely fragile (1) Information Gathering and (2) Reward Attraction.
• Anti-Counterfeiting technology (A-CT) can strengthen security protection within a supply chain however Counterfeiting will still be operating in parallel. • Applying the right User-Centred A-CT can empower consumers with the ability to distinguish genuine products and to select with confidence, prior to purchase. • 3 Pillars of User-Centred A-CT : Complete Transparency - key to trust . Playful Engagement – from anxiety to fun. User-Centred - security validation.
http://banknotes.rba.gov.au/banknote-features/#-new-five Complete Transparency - key to trust . Playful Engagement – from anxiety to fun. User-Centred - security validated.
Q “What will help me to decide which user-centred Anti-counterfeit technology is going to reduce risk and increase perceived trust with my e- consumers?”
Working with a Wine Industry Partner Online Virtual Prototypes Aim: To identify Anti-counterfeiting Technology that has the greatest impact on consumers e-trust?
QR codes Digital Connection with consumers allowing them to get feedback and extra value online
Intricate Patterns, Textures and Hidden Score-marks Deters Label reuse and Re-engineering
Thermochromic Inks Heat changes the colour Delights The consumer with innovative engagement and Colour returns back authenticates the product
Holographic Seals Identifies Tamper evidence and establishes a seal of recognition
Destructive Layered Packaging Protective Identity layering makes counterfeiting difficult with new designs changing often
Working with a Wine Industry Partner Chinese consumer panels Qualitative Multivariate Analysis (QMA’s)
TRUST ADDED- EVERYDAY VALUE DOUBT
Next Steps: • Virtual Prototypes of Industry Partner’s Products: • Applied key Anti-counterfeiting tech • Playful engagement attributes • Online open transparency • Cross cultural study of Australian and Chinese online consumers perceived trust and risk assessed against AC-T. • Develop e-Commerce strategies for market impact.
Contact Us www.foodvaluechain.unimelb.edu.au Partner with the University of Melbourne where we can work together to reveal key market insights that reduce risk and increase e-consumers perceived trust prior to export. Hollis Ashman Caroline Francis Director of Engagement PhD Researcher ashmanhollis@gmail.com c.francis2@student.unimelb.edu.au
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