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Alibaba Teams Up with Visualead To Combat Counterfeit With ‘New Standard’ Of Visual Codes

Alibaba has teamed up with Israeli-based QR technology company Visualead to release a “new standard” of dotless visual codes for packaging, aiming to crack down on counterfeit products, said Visualead today.

The announcement comes three days after luxury goods company Kering Group submitted its second lawsuit against Alibaba, claiming that the e-commerce giant was not doing enough to stop the sale of counterfeit products on its platform. Visualead currently works with Kering subsidiary Yves Saint Laurent in China, as well as YSL licence-partner L’Oreal. Visualead-partner brands including L’Oreal and Ferrero Rocher are already being sold in China with the new codes on their packaging as part of Alibaba’s new Blue Star platform, which focuses on product engagement and anti-counterfeiting.

“Each product carries a uniques dotless code, and when consumers see this code they will get immediate feedback on whether the product was fake,” Oded Israeli, VP of Marketing at Visualead, told Technode.

“They are much more visual appealing, they have about 90% of their surface as a graphic or image. More importantly is that they are more secure, so that these codes can not be forged.” The codes will eventually be used across several of Alibaba’s platforms, targeting O2O services with secure scanner technology that is already integrated into the Taobao platform. Alibaba will also allow brands to incentivize users who scan the codes, offering discounts, memberships and reward programs.

The new partnership is one of several projects Alibaba is working on in a bid to stop counterfeit products being sold on its various platforms. In a scathing Chinese government report released earlier this year, Alibaba was criticized for being too passive in the fight against grey-market goods, as well as bribery and other illegal activity on its platforms. Alibaba denied the recent claims by Kering, saying that it is working hard to tackle the problem, and that “unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive co-operation.”

Kering filed a similar suit against Alibaba in July last year, but later withdrew it, saying that they would be working together with Alibaba in the future to address the issue. Visualead partnered with Alibaba earlier this year with an investment of between 5-10 million USD, following a successful 1.6 million USD A series led by Kaedan Capital and Entrée Capital. The company entered the Chinese market 18 months ago after their win at the 2013 Beijing Global Mobile Internet Conference (GMIC) competition.

“We are very fortunate to have Alibaba on our side to really push the standard of dotless visual codes in China and later globally,” said Oded. “Tencent and Wechat were the main content driving QR codes in China, Alibaba should be the main force that pushes the dotless codes.” Their new technology surpasses previous QR and visual QR technology, making the codes almost indistinguishable from regular images or graphics. The adoption of QR codes has been exceptionally high in China due to their use on social messaging platforms as well as other in-app e-commerce services.