Your Pen Drive Might be Fake

Have you
ever
checked your pen drive before buying it? It might look original, but
can turn out to be a fake one. Yes, this is the buzz going around for
the past few years amidst IT vendors. And, over the past few months,
the intake of these grey pen drives has increased so much that these
distributors have started feeling the pinch of the loss being caused
due to this.

Dinesh
Gupta,
CEO, Datatronics System said, “We sell 2,000 pen drives every month
and our pen drive distribution business goes really well. But, still
we see a loss of 30% in our pen drive selling business only because
of the fake pen drive sellers in the market. After getting fake pen
drives, consumers never get back to our shop. We are losing our
customers because of this.” It is not only Datatronics, but several
other vendors and distributors have same complaints as well for the
fake pen drives thriving in the market.

Recently,
there was a case of fake pen drives of LG and Samsung, which were
available easily at Lamington Road in Mumbai. When contacted, LG was
unaware of any such dealings. Similarly, even New Delhi district
police busted a racket selling counterfeit Kingston pen drives in
Palika Bazar and seized hundreds of fake pen drives. Ashwin Kukreja
from Real Time IT Concept said, “In the Indian market, where
consumers are very specific about prices; it becomes very easy for
people to sell fake products.” And, if this trend continues to
incline, it will become a brand loss to vendors, as well as to
consumers. Manisha Sood,
country manager, SanDisk India and Saarc said, “It's affecting
our brands among partners and customers.” Talking on similar lines,
Ajay Kogta, country manager, Indian Subcontinent, Strontium
Technology said, “Due to the low quality of fake products, the
brand perception/image affected negatively in the market. In the long
run, customers avoid such brands, which bring in fake and
non-reliable pen drives in the market.”

Further,
this
increase in buying of fake pen drives is the result of growing demand
of flash memory
market in India. According to a channel partner, India is likely to
sell 5 mn memory cards and 3 mn USB drives this year. And, over the
next 2 years, the USB drive market is likely to grow at over 50%.
Sood said, “The huge demand for flash memory cards has made this
category a prime target for counterfeiters. Unfortunately, consumers
are the ultimate victims of it. Fake flash memory cards are often
poorly designed and assembled, which may cause them to fail within a
few months of purchase. Hence, it becomes extremely difficult to
distinguish between an authentic and fake product. The existence of
the grey market is also a challenge that our partners face.”

Also, one of
the major players like Kingston, which holds the maximum number of
shares in the flash drive market, too believes that this increase in
the number of fake pen drives is a cause of concern. “Since fake
pen drives are not made with decent quality, users will encounter
problems such as data loss and unstable performance. If users face
problems when using fake pen drives, there will be no warranty
service for them. Therefore, we do suggest customers to buy products
only from authorized distributors and insist on invoices,” said
Nidhi Sethi, director, sales, flash business, Kingston India. Also,
according to Kingston, the demand for USB drives has increased in the
recent past. Alongside, it has also been witnessed that there is an
increase in the number of fake pen drive cases as well.

Speaking on
similar lines, Praveen Sahai, director, sales, India and Saarc and
strategic marketing director, APJ, Iomega commented, “We can not
ignore the fact that there are consumers who look for cheap storage
products with higher storage capacities, and this demand leads to the
manufacturing of fake pen drives. These fake devices often take
advantage of the consumer by reporting much higher storage capacity
than it is actually available in. For consumers, the difficulty of
spotting the difference between the fake and the genuine product is
further complicated by the fact that-on the skin, at least-the
counterfeit product looks real.” These fake pen drives are
manufactured using famous brand names such as Kingston, Transcend,
SanDisk and many more. While manufacturing, it is tweaked so that it
shows 32GB in the properties making it hard to identify it as a fake
at first look. True face of these pen drives begins to reveal once
you start using them. According to
sources, these fake pen drives can only hold data between 512MB to
6GB; maximum depending on how it is manufactured and you can see some
folders automatically get created using huge disk space and can not
be deleted. Taking advantage of the price-sensitive market like
India, where users opt for quality products at a reasonable price,
reputed brand names are being misused by imprinting their logos on
the fake goods.

A peek into
a
cross-section of resellers at Lamington Road revealed that the
majority of them deal in fake products. Traders say that generally,
these products are obtained from Taiwan and Singapore and sold openly
in the Indian market. What makes these drives further look like a
genuine product is their packaging, which is done in such a manner
that it can easily fool a layman into believing it as an original
product. Kogta said, “To fix such issues vendors need to have
innovative security features in their product offering and packaging
and keep changing it from time to time. Also educating customers and
partners about identification of genuine products is another job
which vendors need to do.” Adding to
that Kukreja said, “The selling of fake pen drives has been going
on for a long time now and I think that manufacturers should start
acting very strictly on the same. They can put some serial number for
a particular number of pen drives they are manufacturing and make it
available on their site. In this way I guess even the channel would
be aware about the current situation of real pen drives. Or they
could also send mailers to their partners and customers and make them
alert. I guess the channels must be suffering a loss of 10-20% with
regards to these fake pen drives.”

However,
amidst the fake pen drive market rule, several vendors and
distributors have witnessed that the last financial year proved to be
a great year for authorized selling. Kingston, had a healthy business
growth and dominated the market with around 35% share with the pen
drive sales. Transcend, on the other hand, remained more or less
stagnant but maintained its previous performance by securing 32%
share. Although, the end customer pull for Transcend in the flash
market is still high, Kingston seems to have gained control through a
more organized business approach as well as regular product
availability. Demand for high-capacity pen drives continues to grow
as the most popular entry-level product today is 4GB drive followed
by 8GB and 16GB.

However,
pull
for further high-capacity pen drives declined due to the increased
popularity of external hard drives. Another predominant trend
witnessed in this product category, alongside technology upgradation
and enhanced aesthetics and flashy designs, is the introduction of
new and innovative features like bio-metric, high speed, thinner and
smaller sized pen drives. To attract buyers, brands like Dell and
Transcend came out with newer concepts. While Dell launched pen
drives with pre-loaded movies, Transcend introduced models with pre-
loaded anti-virus. Several entrenched players in the pen drive space
have been taking several measures to control this counterfeiting of
pen drives. “Fake personal device market is usually found across
the globe. These products may be available for cheap rates, but with
poor quality. Mainly, fake products lack credibility in their
post-sales services as well as technical support. They are not worthy
to buy. The high custom duty for importing products will result in
the existence of grey market. This should be curbed,” said style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">Bradley
Chen,
Thermaltake Business Division.

These
vendors
are conducting investigations in different countries, resulting in
numerous raids against counterfeit manufacturing plants, developing
channel marketing programs for partners to stock authorized products,
so consumers can buy with confidence; cooperating with several
industry organizations and local authorities that are working to end
counterfeiting and intellectual property theft. After having
experienced the challenges of fake pen drives in the market, Kingston
is riding high with its measures to curb the selling of counterfeited
pen drives in the market. “We have online verification tools given
on Kingston website, where end-users can verify the product being
genuine or not. Kingston also launched a 'Search for Genuine
Kingston' site, where end-users can find tips to know the Kingston
products they purchased is genuine or not. We have also conducted
raids with the help of local police in order to curb the menace and
track the source,” said Sethi.

Being too
conscious for its brand value, SanDisk has also rolled out a consumer
educational initiative called SanDisk Memory Yatra to familiarize the
techno savvy consumers with the latest data storage options and the
need of buying a 'genuine' card. According to, the company is
working very closely with the Indian Cellular Association to bring
down the duty structure on flash memory products. In addition, the
company is moving aggressively to stop the manufacturing,
distribution and sales of counterfeit flash memory cards carrying its
name.