Cosmetics Industry

The Strategy of the Cosmetics Industry in Using QR Codes to Prevent Counterfeit Products and Collect Customer Big Data for Marketing Benefits

A customer who allowed Birth Note to use their data for a Case Study is a cosmetics manufacturer based in Bangkok. They produce cosmetics for the face, including serums, creams, cleansers, masks, etc. They do online marketing through social media and through agents in different provinces. The business seemed to be going well until the company began to experience frequent counterfeiting of their products. This was due to the fact that the labels and packaging were easy to counterfeit.

Mr. A, the CEO of a cosmetics manufacturer in Bangkok, Thailand, was concerned about the counterfeiting of his company’s products. He considered making the packaging more difficult to counterfeit by adding embossed text to the cream jars. However, this would have been quite expensive, so he decided to pursue other options.

Then, Mr. A saw that there was a hologram sticker, which is a 3D sticker attached directly to the packaging. This hologram sticker could make it possible for customers to notice the difference. Mr. A then tried this method to prevent counterfeit products.

Later, the company found that sales in the most recent quarter had decreased by more than 40%. Mr. A therefore called the heads of each department into a meeting to brainstorm about what the problems were that caused the sales to drop and how to fix them.

After the meeting discussed, it was found that the main causes of the sales decline of up to 40% came from the following problems:

Causes of sales decline

Counterfeit goods

Because the hologram stickers that were ordered from the factory to be pasted on the product were counterfeited by intellectual property violators, the hologram stickers can no longer prevent counterfeiting of products.

Unable to explain to customers how to identify counterfeit goods

The company did not explain to customers how to identify counterfeit goods. They simply thought that by attaching a hologram sticker, customers would believe that the product was genuine.

The manufacturer secretly produces more products than the ordered amount

Normally, the company has contracted a factory to produce products according to the order. However, it was found that the production department secretly produced more than the ordered amount and then secretly sold the products through various channels. Recently, it was found that 5,000 pieces of products were produced in excess, which led to an oversupply of products in the market. This also resulted in the company losing 1.7 million baht in sales.

Marketing efforts off-target, not sure who the real customers are

Since the company markets its products through social media advertising and distributes them through various agents, the company hardly knows who the actual customers are, what age they are, or where they are located. This leads to the company producing the same old products without considering the real needs of the customers.

Distributors sell below cost and across regions

The company distributes its products through various agents in major provinces of Thailand. The marketing areas are divided by region. It was later discovered that cross-border sales were taking place. One of them is the Nakhon Ratchasima agent, who took the products to sell in Udon Thani province because he has relatives there. In Udon Thani province, there is already an agent. This led to customer competition in Udon Thani province. Moreover, they even undercut each other's prices. The company had to negotiate with both parties to stay within the set framework.

When the team at Birth Note learned of these problems from A, we developed a QR code anti-counterfeiting system and a customer data collection system that could solve all of the company’s problems and also added some features that made it more convenient for both the company and its customers to use. The solution we developed is as follows:

1. Print anti-counterfeiting QR Code stickers

Anti-counterfeiting QR Code stickers are unique stickers that are produced specifically for each product. Each product has a unique code. When the company attaches the QR code sticker to the product, it informs customers that the real product must have this QR code sticker only.

2. Customers can easily check whether a product is real or fake

Customers who have purchased a product can check the product with their smartphone by scratching off the sticker and scanning the QR code to verify. When the QR code is scanned again, the system will notify that the QR code has already been scanned. This ensures that the QR code cannot be used to counterfeit the product again.

3. Using the Lucky Draw feature

By holding a lucky draw to win a new smartphone and many other prizes, the company attracts customers who scan the QR code to fill in personal information such as gender, age, the channel that made them aware of the product, the place where they purchased the product, and to complete a survey about their satisfaction with the product and what should be improved.

4. Using Loyalty Program

The company set up a loyalty program that rewards customers for their purchases. Customers earn points for each product they buy, with the number of points depending on the type and price of the product. For example, a face cream earns 10 points, a face mask earns 20 points, and a serum earns 30 points. Once a customer has accumulated 100 points, they can redeem them for a free face cream. This program helps the company retain its existing customers and makes them feel like they are getting a good value for their money.

5. Using Dealer Tracking feature

Using a dealer tracking system to track where the product or box of product came from.

6. Analyzing customer data

Analyzing data by bringing customer data that scanned QR codes into the back-end system to promote online marketing. One important example is collecting data from customers who bought face cream, and then using this data to target online advertising about serums, which are more expensive, to this group of customers, along with offering various promotions.

Based on the experimental use of Birth Note’s QR code system, it appears that the problems mentioned above have been resolved and the company has benefited in many ways, as follows:

The results of using Birth Note's QR code system can be summarized as follows:

Reduce the number of counterfeit products in the market

Because Birth Note's QR codes are 1-to-1 and cannot be counterfeited, counterfeiters can no longer sell counterfeit products as they did before.

Customers can easily identify genuine products.

With unique and brand-aligned QR code stickers, new customers are confident to buy the products to try, or if they are existing customers, they are confident that the products are genuine.

Factories that manufacture products under contract cannot sell the products themselves

Because Birth Note's QR codes are limited in number, if the products are produced in excess of the ordered quantity and then resold, they are still counterfeit goods, as they do not have Birth Note's QR codes.

Collect customer data with the Birth Note's Lucky Draw feature

The lucky draw feature is an attractive incentive for customers to scan the QR code to enter the draw by answering questions set by the company. In the first three months of sales of products with Birth Note QR code stickers, the number of customers who scanned the code exceeded 5,000. This data can be used by the company as a sample to analyze the marketing.

Leveraging marketing with Big Data from customers

Because Birth Note's system can accurately identify the customer's location with an error of approximately 3 meters, the company knows the customer's actual location. This allows the company to know the distribution of products in each area. This enables the company to create promotions and advertising media that are targeted, such as creating brand awareness, attracting new customers, retaining existing customers, and stimulating sales. With these solutions, the company can create a large number of new customers and sales.

Solve the problem of cross-border sales

The company can track distributors in different provinces to see what items they have ordered and whether their location matches the location that the customer scanned. This allows the company to solve the problem of cross-border sales.

Successfully added distributors to foreign countries

A company found that a number of customers were scanning QR codes from Vientiane, Laos. After investigating, they discovered that a local influencer was selling the company's products in Vientiane. The company decided to add an official distributor in Vientiane, which successfully expanded their customer base to Laos.


Counterfeit products are a major cause of revenue loss for companies. They also damage brand reputation, as customers who buy counterfeit products are not getting the same quality as the real thing. Birth Note was able to solve this problem and increase its revenue. The marketing department also used Big Data to improve marketing campaigns, such as targeted online advertising, lucky draws, loyalty programs, and cross-selling. The company also uses Big Data to track its distributors to ensure that they are selling genuine products.

If you are interested in consulting with our team, you can contact us at 099-564-5947, 096-142-9547, or email [email protected] for our team to get in touch with you promptly.

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