New Momentum and the “Mafia of the Future”

June 26, 2009
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It’s hard to believe it’s been more than a year since I talked to New Momentum executives about their plans to help tech companies deal with the rapid rise in counterfeit products. If you read “New Momentum Carving a Slice Out of the $250B Counterfeit Problem,” you may recall that the company specializes in helping electronics organizations identify fake components and products by searching across foreign websites, push e-mails, bulletin boards, forums, gray markets, and other data sources.
Its search technology looks for part numbers. If it locates products being offered at an inappropriate discount, volume, or date, New Momentum sends an alert to the customer’s dashboard, containing all known information about the seller. The customer then uses this to verify whether the products are from legitimate channels or a gray market and whether or not they’re counterfeited or modified (i.e., products that are supposed to meet mil-spec standards, but are commercial grade).

A lot has happened in a year. For one, the company has expanded into additional vertical markets, starting with pharmaceuticals. Last month, we published a case study on the work New Momentum has done with Pfizer.

While

It’s hard to believe it’s been more than a year since I talked to New Momentum executives about their plans to help tech companies deal with the rapid rise in counterfeit products. If you read “New Momentum Carving a Slice Out of the $250B Counterfeit Problem,” you may recall that the company specializes in helping electronics organizations identify fake components and products by searching across foreign websites, push e-mails, bulletin boards, forums, gray markets, and other data sources.
Its search technology looks for part numbers. If it locates products being offered at an inappropriate discount, volume, or date, New Momentum sends an alert to the customer’s dashboard, containing all known information about the seller. The customer then uses this to verify whether the products are from legitimate channels or a gray market and whether or not they’re counterfeited or modified (i.e., products that are supposed to meet mil-spec standards, but are commercial grade).

A lot has happened in a year. For one, the company has expanded into additional vertical markets, starting with pharmaceuticals. Last month, we published a case study on the work New Momentum has done with Pfizer.

While China continues to be the primary home of counterfeit tech products, it’s a more global issue for the pharma industry, with growing operations in Russia, the Middle East, Latin America, India, China, and other markets. It’s also more closely linked with organized crime syndicates than opportunistic manufacturers that are willing to add an authorized third shift to turn out surplus or fake products.

New Momentum is now moving into luxury goods through a new alliance with a European-based supply chain software company that owns the fashion industry. It’s also eyeing the entertainment market.

It’s expanding its range of services too, partnering with a global third-party firm to help customers set up test buys with the intent of getting closer to the source of production. In addition, New Momentum has set up an office in Beijing.

As we’ve written many times, the counterfeit market continues to grow exponentially. When I first interviewed New Momentum CEO Stu Clifton, the U.S. government described counterfeits as a $250B problem. When we talked this week, Mr. Clifton said that the latest estimates make it a $1.2T issue. As he put it, the ramp up is being driven by “the Mafia of the future.”

(Note: In case you’re experiencing déjà vu, this is a condensed version of a slightly longer piece that appeared in First Thing Monday. We believe that anti-counterfeiting efforts merit increased attention.)