The Canadian Cosmetic Cluster had the pleasure of meeting Swiss company, KaiosID at the Innovation Days Barcelona show. This is a great example of virtual trade shows providing connection in days when travel is non-existent. KaiosID is a company to provides excellent solutions for brand protection and consumer engagement. KaiosID was created by Johan Wüthrich and Raphaël Hunziker. This talented dynamic duo worked together at a global packaging machinery company. At the company, they gained the experience and industry insight to create their new venture.
What is Grey Market?
The grey market or dark market refers to the trade of a commodity through distribution channels that are not authorized by the original manufacturer. Grey market products are products traded outside the authorized manufacturer's channel. A great example is products being sold on Instagram or YouTube without the authorization of the original manufacturer. The cosmetic products sold could be real, or they could be fake. It is difficult to know for sure. However, as the distributor has not been authorized by the manufacturer the authenticity of the product cannot be guaranteed. This is potential, where the problems arise for cosmetic brands.
Counterfeit Problem in the Cosmetic Industry?
There are dangerous consequences of counterfeit cosmetic use. Counterfeit cosmetics can be harmful and even deadly. Researchers have found fake cosmetics containing known carcinogens such as arsenic, beryllium, and cadmium; others have exhibited high levels of toxic heavy metals like lead and mercury. The has become a growing problem, even in the USA. Last year, the Los Angeles Police Department (LAPD) impounded counterfeit beauty products worth $700,000. In January 2020, the LAPD seized more than $300,000 in counterfeit makeup products impersonating Kylie Jenner’s company Kylie Cosmetics.
Founder Johan Wüthrich commented during our interview of how in the USA, products are often bought online and replaced with fake products when they are returned. Then the original brand has counterfeit goods in their stock. Cosmetics and pharmaceutical products made up 6.5% of all counterfeit good seizures in the U.S. in 2017, estimated to be worth $69 million.
KaiosID has the perfect solution - a unique invisible pattern for the product packaging. Once the pattern is created you can take it to your packaging supplier and it will be incorporated into your current packaging process. No extra step or added hassle. The packaging gets printed just as it always has but provides extra protection. Unlike the sticker product codes that can be covered or detached from the packaging unit, the pattern is the original packaging unit. The brands can decide who scans the item and give access to different levels of information both in the app and on the platform. After all the information is gathered from the scans during the different steps, the platform summarizes globally all the data of the items.
Not Just Protection - Connect and Engage with Your Brand Audience
As the world turns increasingly to the digital side, companies are desperate to connect and engage with their customers. The brands establish a closer relationship with the final consumer, who scans the product. This allows to track customer responses to advertising campaigns in real-time and thus increases loyalty and trust.
The consumer can scan the item during or post-purchase and gets information that allows them to learn more about the brand, enabling the possibility for targeted marketing campaigns.
Transparency is a huge value for consumers as they can scan and find out additional information on the ingredients, the product's origins, and instructions about how to use it.
For more information on all KaiosID products and services visit their website here.
 Avoiding Grey Market Cosmetics And Why You Might Be Jeopardizing Your Skin Health(Skin Science MD, 2016): https://skinscience.md/avoiding-grey-market-cosmetics-jeopardizing-skin-health/
 Fraudulent Cosmetics and “Anti-Aging” Products
(FBI GOV,2021): https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/fraudulent-anti-aging-products
 Police find animal waste in counterfeit makeup – so it’s not such a bargain after all (CNN,2018): https://www.cnn.com/2018/04/15/health/counterfeit-makeup-seizure-lapd-trnd/index.html
 LA Police Confiscate More Than $300K in Fake Beauty Products (US News, 2020):
 Clothing, jewelry, prescription drugs among America’s most counterfeited items (USA Today, 2018): https://www.usatoday.com/story/money/2018/07/26/clothing-jewelry-prescription-drugs-among-americas-most-counterfeited-items/37022305/
Canadian Cosmetic Cluster Team
Uniting Canadian Cosmetics and Bringing it to the World