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Using trade intelligence to identify counterfeiters licensing expo 2013
The document discusses how trade intelligence from PIERS can be used to identify counterfeiters and gray market activities. It notes that counterfeiting represents a $600 billion global market and describes how analyzing import documents in PIERS, such as unexpected suppliers and consignees, can reveal counterfeit and gray market shipments of branded goods entering the country. The document also provides examples of how identifying supplier and consignee relationships that don't match legitimate distribution channels can help companies recognize illegal trade activities.
Using trade intelligence to identify counterfeiters licensing expo 2013
- 1. USING TRADE INTELLIGENCETO IDENTIFY COUNTERFEITERS The Licensing Expo – Crushing the Counterfeiters June 19, 2013 PRESENTED BY: ALIET MARTINEZ, DIRECTOR OF CLIENT DEVELOPMENT PIERS / THE JOC GROUP INC.
- 2. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 THE GLOBAL COUNTERFEIT MARKET • Represents 7% of all global trade • Cost U.S. companies $250 Billion/year • Counterfeits are responsible for the loss of 750,000 U.S. jobs • Counterfeiters net $600B/year globally • Highest profit margin of any illegal trade • Up to 90% of counterfeits come from China • In 2011, U.S. Customs seized over $200 million in counterfeit goods, representing only a small percent of U.S. imports • Profit margin on counterfeit cigarettes can net 20-1 • Counterfeited medicines is a $75 billion/year market
- 3. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 CAUSES OF COUNTERFEITING • Minimal penalties vs. high profit margin • Overseas manufacturing with limited regulatory oversight • Global economy makes it easy for counterfeits to blend in with legitimate trade • Internet allows counterfeiters to sell directly to consumers
- 4. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 IT’S NOT JUST HANDBAGS AND WATCHES • Consumer goods (high volume low cost products) • Brand name drugs • Cigarettes • Electronics • Luxury goods Popular Counterfeits Threat • Not subject safety regulations and proper testing • Counterfeits have been linked to terrorist organizations • Cost to a brand’s bottom line and brand equity • Violent activity related to counterfeit organizations
- 5. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 PIERS / THE JOURNAL OF COMMERCE HISTORY In 1827, The Journal of Commerce paved the way in trade intelligence by gathering and listing goods on arriving vessels… PIERS continued this ground breaking tradition in the 1970s as the JOC’s‚ first venture in electronic information services. Today PIERS is the most comprehensive database of international trade activity in the world‚ collecting and standardizing data from over 16 million bills of lading annually for U.S. imports and exports.
- 6. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 ABOUT PIERS TRADE INTELLIGENCE PIERS is the most comprehensive database of U.S. import and export activity in the world. The detailed trade data that powers PIERS database is sourced from bill of lading documents collected from U.S. Customs. Every year PIERS processes more than 17,000,000 bills of lading, which translates into over 20,000,000 shipments annually. PIERS turns this raw data into cleansed, standardized, enhanced and validated data points which provide the trusted intelligence that companies use to make profitable decisions.
- 7. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 Available fields: • Shipper name & address • Consignee name & address • Notify Party name & address • Country of Origin/Destination • U.S. & Foreign Ports • HS Code(s) • Standardized Commodity Description • Quantity & Unit of Measure • Weight in MTONs • TEUs • Estimated Value • Ocean Carrier • Date of Arrival/Departure • And More! DETAILED BILL OF LADING DATA
- 8. June 19, 2013 SPOTTINGCOUNTERFEITERS FAKE SNEAKER MANUFACTURING INC. 123/45 NGUYEN THI MINH KHAI PHOUNG 5 - QUAN 3 - TPHCM VIETNAM CANAL ST. SNEAKERS 123 CANAL ST STE 516 NEW YORK, NY 10015 UNITED STATES CANAL ST. SNEAKERS 123 CANAL ST STE 516 NEW YORK, NY 10015 UNITED STATES Overseas supplier unknown to the manufacturer Retailer receiving the goods not a licensed dealer of Nike Shipment lists Nike sneakers in the commodity description Import Bill of Lading
- 9. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 Gray Market: A market where a product is bought and sold outside of the manufacturer's authorized trading channels. Most prevalent among products where the price varies significantly from country to country. Example: A product intended for a particular market is either routed to or legally sold to a distributor in another market where the cost of that product is higher. The difference in price offered by various legitimate markets creates an opportunity for the middleman to obtain branded merchandise at a discount and sell them for higher price than he would have through the intended distribution channel. • It is estimated that gray market diversions cost U.S. companies as much as $63 billion in revenue • Manufacturers may lose approximately 4.5% of sales to gray marketers GRAY MARKET OVERVIEW
- 10. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 • Supply & Demand Imbalance • Distributor Channel Conflict • Disruptive Pricing Pressure • Revenue Cannibalization • Profit Erosion • Negative Customer Experience • Product Warranty & Safety Issues • Legal & Regulatory Risk GRAY MARKET IMPACT • Issues with warranties and returns • Gray market resellers may change packaging or instructions or may be missing entirely • Lack of regulatory oversight by local governments • Lack of quality control • Products may be mishandled or damaged during multiple shipments Impact on the Brand Impact on the Consumer
- 11. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 IDENTIFYING GRAY MARKET ACTIVITIES Licensed U.S. Wholesaler pays $100/unit direct from manufacturer and charges $120/unit Licensed Brazilian Wholesaler pays $60/unit from the same manufacturer and charges $80/unit Rather than spend $120/unit from the U.S. wholesaler, a U.S. retailer places an order from the Brazilian wholesaler at $80/unit which is still significantly less even after the additional shipping
- 12. June 19, 2013 IDENTIFYINGGRAY MARKET ACTIVITY EGYPT ATHLETIC APPAREL ABDEL NABI E’L RAGABI ST, ABO RADI ZONE EL MEHALLA, CAIRO EGYPT FAMOUS FOOTEAR 1 WOODRIDGE CENTER STE 210 WOODBRIDGE, NJ 08879 UNITED STATES Overseas supplier is a licensed Nike distributor in Egypt Retailer is purchasing Nike products on the gray market by importing the product from an Egyptian distributor rather than a U.S. distributor Shipment lists Nike apparel in the commodity description Import Bill of Lading FAMOUS FOOTEAR 1 WOODRIDGE CENTER STE 210 WOODBRIDGE, NJ 08879 UNITED STATES
- 13. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 • Cross-referencing import and export transactions against blacklisted suppliers and distributors can help identify counterfeiters • Consignees that are not licensed retailers or distributors may also be likely counterfeiters • Unusual and unlikely sources of brand name products can be a strong indication of gray market activity • PIERS is the only complete database of U.S. export shipments, allowing you to spot gray market trading from your U.S. distributors SUMMARY
- 14. The Licensing Expo– Crushing the Counterfeiters June 19, 2013 QUESTIONS
Editor's Notes
- #12 Suppliers