Fakes rule the roost in memory market

Stanley Glancy / Mumbai

Fakes or duplicates—the bête noire of industries worldwide—have now made their presence felt in the Indian PC components market. Dushyant Mehta, chairman and CEO of Mediaman Infotech, the Mumbai-based distributor of Transcend memory products, blames the price-conscious Indian consumer for the propagation of fake products in the market. “The customer who spends freely on the latest Pentium processor available in the market resorts to penny pinching when it comes to critical components like memory modules, without realising that it can hamper the overall performance of the system.”

Transcend’s memory module

Mediaman currently sells around 2,000 Transcend memory modules a month. But for every genuine product being sold by the company a fake is sold by an operator located somewhere in Mumbai, Delhi, Chennai or Ahmedabad. If the total market size is taken into consideration—around 2,00,000 modules a month—the losses are tremendous.

The seriousness of the problem came to light when Mediaman started losing major deals to distributors offering Transcend products at rock bottom prices. For instance, IIMAhmedabad cancelled an order when it was offered Transcend modules at a discount of Rs 200 per module. In an industry where margins are already low such huge discounts can run a distributor out of business. Customs duty, excise and numerous other taxes make it impossible for the authorised dealer to offer such discounts. Even genuine products available in the grey market are priced much higher.

Apart from revenue losses even the company’s reputation is tarnished when the system starts malfunctioning. Transcend, for instance, provides a lifelong warranty for all its memory products. But thanks to the defective module, the system starts behaving erratically after a certain period of time—the system could blow up or the operating system might not install.

Said Mehta, “ Transcend has created a market for itself. Hence people find it more profitable to duplicate Transcend’s products. The unsuspecting customer who wants to buy the genuine product might fail to distinguish between the original and the duplicate and end up paying a premium for the inferior product. The end-result is that the company’s image is tarnished.”

But how will a novice buyer distinguish between an original and a fake? Mehta provides several pointers. According to him, the signature of the dealer marks fakes whereas an original comes in a sealed hard plastic package, which can be opened only by the end-customer. Other giveaways include fake holograms and cheaper pricing. An original memory module generally comes at a premium of 15-20 percent. All of Transcend’s memory modules, for instance, have two stickers on it—a little white sticker containing information about the module, and a Laser sticker with the Transcend logo on it. Also, the Transcend brand name is encrypted on the left side of the module.

Other than this, a customer can send a picture of the memory module to Mediaman, which will then distinguish whether it is fake or not. Mediaman is also planning on providing software to enable end-customers to check whether the speed of the product they have bought matches the standards set by Transcend.