Removing Gray Market Threats Using Advanced AI and Human Expertise

As brands continue to grow their global appeal, consumers in international markets are keen to get their hands on popular products at lower price points. Third-party sellers have filled this gap with gray market goods – but this can often be in contravention of local regulations. Worse still, some of these products have had expiry dates and original packaging removed, putting consumers at risk.

Our latest eBook, The Three Key Components of a Successful Brand Protection Program, analyzes the current threat landscape facing brands and the tools businesses can use to maintain consumer trust and brand reputation.

Bad actors exploit consumers through three distinct threats: counterfeits, brand impersonation, and gray market goods. Read this blog to explore gray market threats in more detail and learn how you can adapt your Brand Protection strategy to safeguard consumer trust and prevent revenue leakage online.

Table of contents:

• The impact of gray market goods on consumers and brands
• How Unilever combats high-risk parallel import
• How you can stop grey market sellers from winning the AI arms race

The impact of gray market goods on consumers and brands

Consumer price sensitivity, globalization, and the rise of eCommerce are seen as large driving factors behind the growing gray market and influx of parallel imports that brands are facing today.

Grey market threats are varied and stretch across the whole value chain. Manufacturers overproducing, authorized distributors not adhering to resale policies, sales by unauthorized distributors, off-label sales of prescription medication, and the sale of expired products are just a handful of threats to brands and consumers.

As its name suggests, the gray market is a murky area where detection and enforcement options are not immediately clear. The risks, on the other hand, are well documented; gray market threats put revenue and licensing agreements at risk – and there is the potential for consumer harm in highly regulated industries. Left unchecked, these issues can draw the scrutiny of regulators and lead to fines or costly legal action.

However, there are hurdles that you’ll likely face when tackling gray market threats. You’ll need to navigate a plethora of national or regional regulations that govern issues such as parallel imports in different jurisdictions.

Unilever: Combatting high-risk parallel imports

Unilever has a large portfolio of brands available across countless territories and regions. Each territory has its own regulatory regime, and products require approval before being distributed. On behalf of Unilever, Corsearch flags parallel import goods that are being sold in territories without regulatory approval, preventing reputational damage and potential penalties.

For one Unilever global beauty brand, Corsearch’s image technology revealed that 70% of US listings were being shipped from India, and the products likely did not have approval from the U.S Food and Drug Administration (FDA).

With the help of Corsearch’s analysts, Unilever was able to take down the infringing listings, preventing any potential intervention by the regulator. Prior to partnering with Corsearch, Unilever’s brand teams had little visibility of parallel imports such as this and could not proactively enforce against high-risk listings that put consumers at risk.

“Corsearch provides the best capabilities to spot this content and to make sure that we are in control of taking it down.”

Svetlana Tsareva, General Counsel Skin Care, Prestige and Head of Brand Protection at Unilever

Gray market enforcement

When developing a gray markets strategy, brands must first investigate the origins, volumes, target territories, online representation, and sellers of the goods.

Listings for gray goods such as parallel imports will often contain official imagery to appear legitimate, misleading consumers. Brands can reduce these listings by enforcing copyright laws. Regulatory enforcement is also possible if imported products fail to meet local regulations, such as language requirements or safety standards.

Additionally, some platforms prohibit parallel imports. Brands can leverage these policies by providing evidence of the goods origin – such as serial numbers or packaging details – which can be obtained through a test purchase.

How you can stop grey market sellers from winning the AI arms race

Gray market sellers are turning to generative AI tools to create detailed product illustrations, advertising materials, and listing descriptions at speed and scale. And this issue is only set to grow as AI tools become increasingly intuitive. So, what can you do to stay ahead of the threats and safeguard brand reputation?

While AI certainly can be used for illicit purposes, it is also a force for good. Businesses are already harnessing it to detect, predict, and act against a multitude of threats, protecting consumers from harm.

What is hybrid intelligence?

It takes human intervention and diplomacy to stop an arms race. That’s why it is critical that brands can harness a combination of the speed, scalability, and pattern recognition capabilities of AI with the judgment of industry-specific experts with access to the largest datasets. This approach is known as ‘Hybrid Intelligence’.

This synergy of advanced AI and human expertise allows you to detect, prioritize, and remove gray market threats rapidly across all channels. With high degrees of accuracy, you can protect brand reputation and safeguard consumers, with greater impact and improved ROI.

As highlighted in our recent eBook, Brand Protection solutions underpinned by hybrid intelligence enable you to take down gray market threats at scale – preventing consumer harm, regulatory infringements, and revenue leakage.

Automated detection and threat prioritization

Automated threat detection and prioritization allows you to find and remove gray market listings across your key channels. AI reduces manual workload and speed up threat detection by recognizing the hallmark signs of gray market goods – such as the item being sold from an unauthorized country, non-branded imagery, lower price points, and low stock count but high sold count.

How AI addresses gray market threats – An example of how a parallel import listing on a marketplace is automatically detected

Image technology

Advanced image technology allows you to match unbranded images extracted from gray market listings against a library of images. You can find text in images with optical character recognition (OCR), and similar (but not necessarily identical) products and brands with similar matching. Use logo detection to match your logos, symbols, and patterns – even if obscured.

AI-assisted enforcement

Your Brand Protection platform should deploy AI that learns from the actions of analysts, quickly recognizing risks and recommending the top threats for action. The more actions taken by analysts, the more your AI will be able to flag similar infringements using an enforcement predictability engine.

Advanced AI enables you to surface over 70% more threats that would otherwise be missed. Auto-generated takedown notices and platform APIs mean you can improve time to action and minimize the risk to your consumers.

eBook: Building a Successful Brand Protection Program

Successful Brand Protection programs combine three key components to deliver substantial ROI.

Use our eBook to dive deeper into the technology and expertise you’ll need from your solution provider to realize your strategy.

Read eBook >

Get visibility and control of gray market threats, anywhere online

To find and action the gray market listings that present the most risk, your team needs the right solution that harnesses automation and expert input. We blend advanced AI and human expertise to provide leading global brands with anti-gray market solutions that protect consumers from harm and preserve vital online revenues.

Our Brand Protection solutions give you:

• The broadest visibility of threats across all online channels
• Instant identification of gray market listings
• Enforcement with proven success
• Lasting impact to protect your brand, IP, and consumers

Our imaging AI uncovers 70% more than keyword searches alone, while our prioritization engine saves you hundreds of hours in manual review time.

Request a demo to see how you can harness our technology to swiftly detect and remove gray market threats across your key channels.