How to deal with the surge in counterfeit essential goods?

Concerns over widespread counterfeiting

Recent high-profile crackdowns have exposed large-scale counterfeiting of essential goods like milk, cooking oil, medicine, and dietary supplements. These counterfeits not only endanger public health but also cause significant economic damage. The proliferation of fake goods cuts into the revenue of legitimate products, damages brand reputation, and seriously impacts Vietnam’s manufacturing community.

“Businesses must pay fees to protect their intellectual property rights and face legal costs when taking action against copycats, while counterfeiters operate freely, creating unfair competition,” explained Dr Nguyen Manh Hung, Senior Program Manager of Logistics and Supply Chain Management at RMIT University Vietnam.

“Low-quality counterfeit goods also pose health risks to consumers and erode trust in entire industries. This is particularly damaging for essential products like food, beverages, pharmaceuticals, and daily consumer goods,” he said.

According to the RMIT academic, efforts to combat counterfeiting in essential goods face major hurdles. High costs and increasingly sophisticated fake products make verifying origins difficult. Counterfeit goods also tend to circulate through informal distribution channels, where the legal framework is too weak to enforce effective penalties.

“This makes improving supply chain management a matter of survival for manufacturers of essential goods,” said Dr Hung. “It can also be a way for them to gain competitive advantage in the current environment.”

How businesses can deal with counterfeits

Dr Nguyen Canh Lam, a lecturer in Logistics and Supply Chain Management at RMIT University Vietnam, said boosting product traceability within supply chains should be a top priority.

Various studies have suggested that building blockchain-based information sharing apps for supply chains can help fight counterfeiting. Imagine you are buying a bag of rice – you can use your phone to scan a QR code on the bag to check the product’s origin and logistics data that are stored securely in the producer’s blockchain-based app.

Blockchain has a clear advantage over traditional centralised storage systems – where information can be manipulated or altered by businesses, causing users to lose trust in the data they read.

“Blockchain technology provides a secure way to track and verify product authenticity while ensuring data integrity and traceability, making it harder for counterfeit goods to enter the supply chain,” said Dr Lam.

He added that this technology can help businesses prove their transparency to consumers at every stage of the supply chain.

“Using blockchain-based traceability software forces companies to be accountable for their data and allows regulators to track and investigate counterfeits more effectively,” he said.

Dr Lam also believes that using tamper-proof packaging remains an effective solution to protect essential products from counterfeiting. This type of packaging is designed to prevent opening or tampering with the product without leaving clear signs.

Common tamper-proof options include sealing tape, shrink bands, induction seals, blister packs, and security labels with special adhesives or designs. These types of packaging cannot be reused, helping deter counterfeiters. Packaging should feature identifiable marks such as patterns, registered names, logos, or images that are difficult to replicate.

Manufacturers can also print QR or barcodes directly on packaging for consumers to verify the origin of individual product batches on their official websites. For high-value items, RFID or NFC chips embedded in each product are another effective anti-counterfeiting measure.

Cyber-physical watermarking – printing digital watermarks directly on products – is another important low-cost technology to fight fakes, especially in the food and pharmaceutical industries. Known for their use in copyright protection for videos and digital images, watermarks can now be integrated with physical printing to mark the authenticity of essential goods.

For example, a 2022 study published in the Advanced Functional Materials journal demonstrated how FDA-approved food colouring could be used to inkjet-print watermarks onto individual medicine doses and even individual pills, providing a verifiable method of authentication.

These technologies add extra layers of protection, making it harder for counterfeiters to commit crime and helping consumers access authentic, intact, and safe products.

In addition to applying these methods, businesses need to increase communication with consumers, helping them be more vigilant and reducing the prevalence of counterfeit products.

Consumers need to build awareness

On the consumer side, building awareness is more crucial than ever. In addition to staying updated about counterfeit trends and buying only from reputable sources, Dr Hung said consumers should learn about the anti-counterfeiting methods being used by trusted businesses.

“People should make it a habit to use their smartphones to scan QR codes, embedded chips, or visible watermarks to verify products. They should also support brands that offer transparent and verifiable origin information,” he said.

Fostering a consumer culture that rejects counterfeits is critical, especially since buying knockoffs has long been normalised in Vietnam when it comes to products like clothing and electronics.

According to Dr Hung, this behaviour has fuelled a downward spiral where fake producers take market share from honest companies, distorting the economy and enabling illegal practices.

“This has encouraged the growth of sophisticated counterfeit supply chains on a large scale – producing not only low-quality goods, but also items that may threaten people’s health. It’s a trend we need to reverse by every means possible,” Dr Hung concluded.

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