Toshiba, Samsung in SA warn of rise in counterfeits

Toshiba said that in addition to the associated financial losses for manufacturers, another problem caused by the counterfeit or "grey" market was that it created a lack of trust in product quality and could harm brand value.

Affected markets, products

Reon Coetzee, Toshiba's regional sales manager for southern Africa, said last week that it was not only electronic items that were affected, but that luxury goods, cars and pharmaceuticals also faced this battle.

"All manufacturers have to compete with grey-market players as they expand into emerging markets in Eastern Europe, the Middle East and Africa specifically, and grey market devices are no longer just ultra-low cost models, but higher-end models are also affected," he said.

George Ferreira, Samsung's chief operations officer for sub-Saharan Africa, said that one of the challenges faced by Samsung in penetrating the African market was counterfeit products infiltrating the market, especially in the cellphone sector.

Losses

It is estimated that manufacturers lose about R38bn a year through this counterfeit market.

"Such grey-market activity impacts the brand of the products, results in loss of profit margins due to reduced grey-market product prices and can also affect the customer's confidence in the brand," said Coetzee.

It could also damage a brand's relationship with its distribution channel, while the customer could lose out with products not being eligible for full warranty, he said.

Accredited dealers

There has been a growing demand from resellers for a level playing field to compete against rivals selling cheaper fake or grey products, along with stronger action by vendors to police their supply lines.

Since multinationals mainly deal with accredited resellers, many vendors believe that vendor accreditation programmes are losing value because unaccredited resellers sourcing products from the grey market can undercut those that play by the rules.

Verification

To eradicate the market for counterfeit products, Toshiba has launched "Approved for Sale in Emea (Europe, Middle East and Africa)" stickers, which come with all official products to provide the customer with a guarantee that the product has come from an authorised dealer.

Coetzee said this meant that any Toshiba laptop with the sticker came complete with an array of services that customers could benefit from, including a one-year regional warranty, as well as coverage of replacement parts, shipment and labour.

Ferreira said that Samsung was attempting to minimise and eradicate the parallel importation of counterfeit products through the use of e-warranties, whereby consumers register product serial numbers prior to purchase.

Source: Business Day