Israeli start-up helps Chinese retail giant beat counterfeiters

Five months after announcing a major investment in the firm, China online commerce giant Alibaba has put Israeli start-up Visualead to work – producing “dotless” QR (Quick Response) codes that will help the company battle counterfeit goods.

As an online marketplace, Alibaba is vulnerable to unsavory entrepreneurs who counterfeit luxury goods made by some of the world’s top names – an ongoing problem in China. Now, as a publicly traded company, the company has been working hard to prevent counterfeit goods from being traded through its site – and for help in doing that, it has turned to Visualead to develop unique, decorative – and unduplicable – QR codes for high-end products.

The new Dotless Visual Codes debuted Monday as part of its “Blue Stars” platform for product engagement and anti-counterfeiting. Alibaba’s new platform, for which Visualead is a leading technology partner, enables product manufacturers to print labels with unique codes for each individual product package. When consumers scan the Blue Stars codes with Alibaba Group’s Mobile Taobao application they receive information about the specific product, such as feedback on the authenticity of the product they are holding or targeted online promotions directly from the product brand.

Leading brands, such as L’Oréal and Ferrero, have created millions of unique Dotless Visual Codes for their product packages sold in China.

QR codes are the indecipherable images for mobile devices that are used as “shortcuts” to reach websites. Using special scanner software, a mobile user aims the device’s camera at the QR code, which, when it is interpreted by the scanner, opens up an Internet browser leading to an associated web page – with more information about the product, or a vendor page where a user can buy the product online.

In the West, QR codes are generally used for commercial purposes, but in China, users have taken them to a whole new level, said Visualead’s VP of Marketing, Oded Israeli. “Use of QR codes in China is not like anything in the Western world,” said Israeli. “Everyone in China has their own personal QR code, and everyone wants to stand out, to differentiate himself or herself from the crowd.”

Visualead’s QR codes do just that, utilizing aesthetic shapes and and color to create “designer” QR codes that can be made to order for products and companies. For example, in a previous deal, Visualead enabled users of China’s Facebook-like social network Renren to create their own QR codes using photos, with the Visualead system converting a JPEG image into a QR code with elements of the photo intact that users could deploy on the web, on stationery and letterheads, etc. Visualead has also perfected animated QR codes, even more useful for online or electronic advertising because they stand out more, the company said.

The design, of course, must incorporate the proper elements of QR codes, following programming rules and ensuring that cameras and software can read the codes without a problem. It’s not just technology – it’s an art, said the company, but well worth the effort; according to Visualead’s research, consumers are four times more likely to scan an aesthetically-pleasing Visualead code than a “regular” one.

For Alibaba, Visualead has taken its unique QR codes a step further: The new codes require a secure scanner application to scan the codes, in this case Alibaba’s Mobile Taobao app. With the app, users can check with the manufacturer or distributor if the product they received is genuine. If it isn’t, Alibaba can take action against the seller, pursuing legal options or at least kicking the offender off its network.

“Alibaba Group is dedicated to providing our community of merchants with innovative solutions to help them grow in today’s mobile era. We are happy to work together with Visualead to introduce its new Dotless Visual Codes standard to our merchants as an important part of our Blue Stars platform,” said Zhang Kuo, director of Alibaba Group’s mobile business division.

“Visualead is leading the O2O technology market since its foundation in 2012, introducing innovative technology standards such as our patented Visual QR Codes, Animation QR Codes and Video QR codes,” said Nevo Alva, co-founder and CEO of Visualead. “Our Secure O2O offering answers a growing market demand by leading enterprises worldwide for secure solutions to power Offline to Online transactions on smartphone devices. The new Dotless Visual Code standard, which is based on our team’s deep expertise in computer vision, machine learning and O2O user experience, answers the enterprise’s need for security while increasing consumer engagement with the brand.”