Project Zero. How Amazon wants to deal with fakes
In 2016, counterfeit sales reached $ 509 billion, or 3.3% of world trade. The figure, if you think about it, is scary. Every thirty purchased product is fake. Back in 2013, the surrogate volume was 2.5%, in 2010 - 1.8%. The trend is clear. It is expected that by 2022 fakes will be sold already at $ 991 billion. And their total value will exceed $ 2.8 trillion.
The rise of fake goods is slowing innovation and economic growth. Lost jobs (by 2022 - at least 5.4 million, of which about 870 thousand in the United States). Indeed, why develop something of your own, if you can take something successful, copy its appearance, and go sell it without investing a dime in R&D. Several Chinese companies changed their minds, and, after years of copying, decided to create their own products, and became even more successful (take at least the success story of Huawei). But the majority never go to this stage, preferring to make easy profits.
This also worries us. We deliver goods from the United States , and many take it from us precisely for this reason: they do not trust the Chinese. In Russia and China, counterfeit products are almost more than the main ones. These are Apple appliances (especially cables, adapters and all accessories), branded clothes and shoes - every fifth item sold in these categories is fake. According to Red Point, in the end, 32% of buyers are not sure about their purchase.
It seems impossible to defeat hundreds of thousands (without exaggeration) of various companies involved in the production and supply of counterfeit goods. If you've been to the tourist areas of Spain, you know how many different varieties of Gucci sell in broad daylight on spread out blankets. And about a thousand and one ways to fake New Balance sneakers in China can be found here . But some companies are trying to fight the infection. Exchange StockX , for example, hires professional appraisers, paying them good money, supplies the equipment - and all in order to ensure that no counterfeit site. It takes them from ten minutes to half an hour to test one pair of sneakers.
Even with these red circles - at least kill can not tell
Amazon came up with another way. Spending half an hour to research each product here is physically impossible. Her website posted 650 million different products, mainly just from the most “fake” categories (shoes and clothes - 186 million). Instead, the company implements artificial intelligence, and combines the efforts of all the most famous brands. So the store expects to reduce the number of fakes to zero.
Fakes on Amazon
Amazon Marketplace - a platform that allows third parties to display their products in an online store - in the 2000s became the main driving force behind the growth of the IT giant's business. She is now estimated at $ 250 billion, while the store’s own sales are worth $ 120 billion.
Amazon is more than happy with this state of affairs. Jeff Bezos can do nothing, fall off in an armchair, put his hands behind his head and watch him dripping money. The company receives a minimum of $ 39.99 per month from each seller, plus additional fees for placing the product in the warehouse, shipping from Amazon, the appearance of the product in recommendations, and so on. More than 2.5 million independent firms now sell their products on Amazon, they provide more than half of the sales on the site.
But this feature of doing business, of course, has its drawbacks. Amazon does not control these sales. And some sellers use this chance to trade fake goods in the planet’s main online store. Often these products are many times cheaper than the originals. So, on the one hand, they are easy to calculate, and on the other, the seller has a chance to sell a good batch until they open it. And then, when he is banned, take out an Amazon Marketplace under the guise of another person. But there are fakes that are sold at the price of the original. Here it is more difficult to calculate them, and although there are fewer sales, they can hang in the store for months, or even years.
Thanks to existing security systems, this is not a huge problem for the end customer. Firstly, the number of fakes on Amazon is relatively low (less than 2% even in “risky” categories). Secondly, if the buyer discovers that the goods are counterfeit, the money is refunded to him, and the seller is removed from the platform, such is the store’s policy.
But having fakes is a big problem for Amazon itself. She does not want to pay compensation from her pocket at all. And some reputable brands make claims. Birkenstock sued Amazon because of its sandals. Those sold on the site for $ 20 cheaper, and then fell apart after a third sock. Mercedes-Benz won the trial for fake wheel covers. These and other companies (Celine, Dior, Givenchy, Swatch) now do not display their products on the site in protest.
Amazon doesn't even argue with them. She also does not like that some scammers fool her and those of her clients who did not notice or did not report a fake. Until recently, this was fought "head on." Fakes were exposed by several algorithms and a couple of hundreds of “snoops”, the results of which were then checked by experts. Bezos even proudly said that 99% of customers have never visited a fake product page. But the time has come for more thorough decisions. Otherwise, all legal claims will not be repelled soon.
What is Project Zero
Everything ingenious is simple. Only famous brands are faked, right? Otherwise, there is no sense in faking, it’s just an ordinary low-quality product. But what if brands were given the tools to personally track where counterfeit is. Companies themselves are best aware of their products, and whoever has more interest in the fight against fakes, he can devote more time to this. And to help identify potential fakes will be a special new algorithm with machine learning, which gradually more and more distinguishes the fake, given what listings you blocked before.
And now - the company recently announced Project Zero ("zero" because the final goal is zero fakes on the site). It's funny that earlier the same name for their project was chosen by Google - apparently, the IT giants really like it.
The brands that will participate in the system must provide Amazon with their logos, trademarks, product photos / descriptions, and any other key information about their products. Amazon’s algorithms will then scan 5 billion pages every day, identifying fake candidates. Firms will also be able to send an online store a database with unique codes for each product manufactured. When the product leaves the warehouse, this code will be scanned. If it is suddenly not in the database (or such a code has already been purchased earlier), Amazon will be able to "wrap" the goods, instead of sending it to customers.
The main goal of the new technology, as the company says in its blog , is "to become proactive, not reactive." Previously, if a brand like Mercedes-Benz found counterfeit, he needed to fill out a report about it, send it to Amazon, wait for an answer. If the reaction has not been reported within a couple of weeks, the brand could lose its nerves. Now - companies can directly remove their products from the site without asking permission from the store. And for those who still managed to buy these products on the site, a refund may be prescribed.
The system is remotely like fighting copyright in YouTube. But Amazon, unlike Google, has taken several measures so that it is not abused. Firstly, no monetary profit is expected for companies that have “blocked” a product on the site. Even more: they will pay the store. At + $ 0.01- $ 0.05 for each own product that the company will exhibit on the site. Secondly, it is still beneficial for brands to have their products sold by anyone. If this is not a fake, it turns out that at first the goods were still bought from her. Thirdly, Amazon will check the positions that companies have taken, and can restore them if the seller proves his honesty.
Several small brands have already taken part in testing the system. Vera Bradley with her handbags, Thunderworks with pet supplies, Kenu with smartphone accessories, Chom Chom with lint removers. Amazon says it allowed proactively ban 100 times more fakes than it did before reactively after receiving complaints from companies. As a result, the company’s fakes are even smaller, and delivering from the USA from Amazon to Russia becomes even more reliable. There is no risk of running into counterfeit products, especially from popular brands.
Two hundred of the largest brands, from Apple to Nike, as well as several smaller, but often fake, like Sandisk, have already received invites to the new system. Small companies can join the waiting list .
What does this mean for buyers
Obviously, a decrease in the number of fakes. But not only. Forgeries used to do only moral damage, the rest was compensated by the company. The main thing is to expand the list of goods sold on the site. On Amazon you can buy, consider everything. Even Russian buyers are well aware of this. The exception now is only a few of the most “luxury” brands of clothes and shoes. Branded sneakers, watches, handbags, hats and sunglasses with all the famous names. Until recently, these brands avoided being placed in the general market place, so as not to give fakes validity. Their strategy was to make purchases to the maximum directly from their own website. Even if part of the audience is lost, the brand name is more important.
Which iPhone is real?
In order to somehow deal with this, before Amazon concluded exclusive partnership agreements with top brands. So on their website appeared separate pages with all the branded products of Disney , Hugo Boss, Louis Vuitton, Nike , and more recently, Apple . Now these somersaults are no longer needed. All those who consider themselves important brands will simply supervise the content themselves, so there are no more barriers for them.
And after Amazon tests this system, perhaps it will be adopted by other large online stores, including Chinese, where the problem is so serious that the Chinese themselves prefer branded goods to take abroad.