- Core Function: A Dual Shield of Physical and Digital Barriers for Authenticity Verification
The fundamental purpose of anti-counterfeit labels is to assign a unique identity to each product through physical features or technical encoding, enabling consumers and regulators to distinguish genuine products from fakes. This function relies on the non-replicability or high cost of replication of the applied technology, which can be divided into two main categories:
(1) Physical Security: Creating Barriers Through Rare Materials and Precision Craftsmanship
Traditional physical anti-counterfeit methods use unique materials or processes to deter counterfeiting, such as:
Specialized Materials: Including laser holograms, thermochromic inks (which change color with heat), and UV-fluorescent inks (visible under ultraviolet light). These materials often require certified production capabilities or expensive equipment, making them inaccessible to counterfeiters.
Advanced Craftsmanship: Microtext (text or images only visible under magnification), die-cut embossing, and watermarked paper are examples. These require high-precision equipment and technical expertise, posing a significant barrier to replication.
A classic example is the watermark and security thread in banknotes — even if counterfeiters can replicate the pattern, they cannot reproduce the translucent and layered quality of the genuine material. The advantage of such labels is their low user threshold: consumers can verify authenticity by simple observation, heating, or UV light, without any specialized tools.
(2) Digital Security: Enabling Full Supply Chain Traceability Through Unique Codes
With the rise of information technology, digital anti-counterfeit labels have become mainstream. These labels assign each product a unique code (e.g., QR code, barcode, or embedded NFC chip), which consumers can scan to verify authenticity. Compared with physical methods, digital labels offer:
Non-replicability: Codes are generated and encrypted in the brand’s backend system. Each scan triggers real-time validation, and counterfeit codes not in the database are flagged as invalid.
Dynamic Verification: Some advanced systems adopt a “one-time valid” mechanism — the first scan confirms authenticity, while subsequent scans show a warning such as “already verified,” preventing reuse of the label on fake goods.
Information Transparency: Beyond authenticity, digital labels can display production batch, manufacturing date, sales region, etc., offering consumers a clear view of the product’s origin.
For instance, Moutai’s tracking code not only verifies authenticity but also shows the distillery, storage data, and distributor credentials, cutting off the possibility of unauthorized distribution and counterfeiting. This elevates anti-counterfeit efforts from static identification to dynamic verification, significantly increasing the difficulty of forgery.
- Extended Functions: From Anti-Counterfeiting to Channel Control
Anti-counterfeit labels are not only about verifying authenticity — they also empower brands to monitor and manage distribution, addressing issues such as unauthorized resale and price disruptions. These capabilities are critical for maintaining orderly market operations.
(1) Channel Management: Preventing Unauthorized Cross-Region Sales and Price Chaos
Brands often adopt region-based pricing strategies to match local purchasing power. However, some dealers may transfer lower-priced goods into higher-priced markets to earn more, causing pricing confusion and damaging local distributors. Anti-counterfeit labels can embed regional or distributor-specific identifiers to monitor distribution:
Brands can embed sales region codes (e.g., prefix digits indicating province or region). Consumer scan data allows the brand to track whether a product is sold in the intended area.
If scan data reveals unusual activity outside the assigned region, the brand can quickly trace and penalize unauthorized distributors.
For example, a cosmetics brand assigns each provincial distributor a unique QR code prefix. If the system detects frequent scans of Province A’s products in Province B, it flags the activity as unauthorized reselling. In this way, anti-counterfeit labels act as “channel monitors,” helping brands preserve pricing integrity.
(2) Supply Chain Traceability: Making the Entire Product Journey Transparent
When combined with IoT or blockchain technologies, anti-counterfeit labels can provide end-to-end traceability from manufacturing to final sale:
Production stage: Labels are bound to production data, recording batch info, shift schedules, and QC results.
Warehousing: Scan-ins register time and location, tracking storage details.
Distribution: Distributors scan products out, updating their status to “in circulation.” Consumers can then view the full movement history.
This level of visibility helps locate counterfeit injection points (e.g., if a batch appears on the market but lacks warehouse data) and supports recall operations — if a defective batch needs to be recalled, the brand can trace it precisely via label data.
- Added Value: Building Trust and Empowering Brand-Consumer Relationships
Anti-counterfeit labels are evolving beyond “fraud prevention” to become symbols of trust between brands and consumers. Over time, they influence purchase decisions and strengthen brand credibility, generating multiple layers of value:
Consumer confidence: Knowing that products are protected by verified systems increases trust in the brand.
Brand equity: Anti-counterfeit technology becomes part of the brand’s premium image and commitment to quality.
Data insights: Scan data provides valuable consumer behavior analytics, enabling better marketing and product optimization.
