MVMT Watches knew many counterfeit versions of its high-end wristwatches existed.
But the watch retailer and manufacturer didn’t realize the scope of the problem until it hired a firm that specializes in anti-piracy technology to manage the problem.
“Before the partnership we believed there were probably a few thousand different listings out there between the websites we were aware of,” says Joe Spallone, intellectual property rights manager for MVMT Watches. “They found so many more sites that we weren’t aware of.”
Since MVMT, No. 407 in the Internet Retailer 2017 Top 500, started using technology from Spain-based Red Points in November 2016, the vendor has removed 25,000 listings of counterfeit MVMT products. In the year prior to hiring Red Points, Spallone and his team were able to take down about 1,000.
Red Points software finds counterfeits by using image recognition technology that scans sites looking for the retailer’s copyrighted or trademarked brand name, logo or product images, Red Points CEO Laura Urquizu says.
The vendor even found 11 websites that were pretending to be MVMT Watches and selling its products. For example, an unauthorized seller had a website called “MVMT Europe” and listed MVMT watches for sale. If a shopper made a purchase, the fake retailer would then buy that MVMT watch from the real mvmtwatches.com and insert its customer’s address information into the website, essentially making MVMT Watches a drop shipper for retailers posing as MVMT.
The fake retailer often listed watches at a slightly higher price to make money on the sale. The copycat retailer also may have been exploiting MVMT coupon codes for first-time buyers in order to improve its margin on the purchase.
The pretend MVMT websites were slick and done well, so it was easy to fool consumers, Spallone says. The unauthorized seller would list MVMT watches in that country’s local currency, whereas MVMT at the time listed all of its products in U.S. dollars. “If I didn’t work for the company I would think this must be [MVMT’s] European website,” he says.
Though the websites didn’t sell counterfeit goods and MVMT still made a profit from the sales, the sites were an infringement on the retailer’s trademark and brand. Red Points is in the process of getting all the fake websites shut down, Spallone says. To make the MVMT site more attractive to foreign buyers, the retailer added a feature that detects a shopper’s IP address and will then list products in the consumer’s local currency.
Before hiring Red Points, MVMT found out about counterfeit sellers from consumers who bought knockoffs. For example, a shopper would buy a MVMT-branded knockoff for $5-$15 (versus $95-$160 for a real MVMT watch), likely from a large foreign online marketplace such as Alibaba Group‘s Tmall, Taobao or AliExpress.com, or DHGate.com, another Chinese site, Spallone says. Typically, the knockoff watch breaks and the customer contacts MVMT’s customer service team. The consumer will send a picture of the watch, and MVMT can tell if it’s authentic or not.
From there, the customer service representative will ask the consumer for the link to the page where he bought the product. MVMT will then go through the steps that the marketplace has in place to remove counterfeits, however, it usually takes two weeks or more for the marketplace to remove the listing, Spallone says.
MVMT also would discover counterfeits from searching on Google, Facebook Inc. and online marketplaces. Spallone finds sellers using MVMT’s product images to sell the counterfeits off of websites where the retailers doesn’t sell its products. Such sellers are easy to find, but it would take a few weeks to get them removed, he says.
In addition to damaging its brand, dealing with customers who bought counterfeits eats up MVMT’s time. If a consumer did buy a counterfeit watch that broke, MVMT will apologize, explain the situation and give him a discount code to buy an authentic watch via mvmtwatches.com, Spallone says.
Red Points has software that scrapes thousands of websites to find counterfeits and then works to get them removed. A retailer client sets up rules to expedite the screening process. Examples of such rules: If the product is sold from a domain address in India, automatically move forward to remove the product; if the product is listed on Amazon’s marketplace, the retailer will give final approval on whether to pursue removal. With the vendor’s services, retailers have a dashboard to see where products are removed, which removals are pending and which ones need retailer approval.
Red Points, which works with major marketplaces, can have counterfeit products removed in about a day, Spallone says. Previously, he had to fill out a form for each counterfeit listing, but Red Points can get 100 listings taken off in one swoop, he says. If the counterfeits are sold off of websites outside of major marketplaces, the vendor sends letters citing copyright infringements and has a legal team of intellectual property lawyers if needed.
Urquizu says fashion brands are the most susceptible to counterfeiting because of the trendiness of the products.
For example, a consumer may search for trendy Ray-Ban sunglasses on Google and find a link to a cheap pair that is counterfeit. Red Points has about 250 clients—roughly 200 retailers and 50 digital content providers.
Red Points says it removes between 90-100% of all counterfeits for its clients and guarantees all counterfeits are removed from at least the first three pages of Google search results, Urquizu says.
Red Points charges retailers $1,500 to $8,000 a month, depending on the volume of counterfeiting, Urquizu says. The service costs MVMT $1,600 a month, Spallone says. It took about three weeks for MVMT to set up the system and start using Red Points, he says.