Counterfeiting of textiles, apparel and luxury goods – combating the booming illegal business

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The counterfeiting market is booming. Almost all industries have to deal with fake products that cause multi-billion losses for companies and governments. Fashion is a highly competitive industry that is estimated at $3 trillion and makes up 2 percent of the world’s Gross Domestic Product. Looking at this number, we can easily comprehend why this industry is so attractive to criminal organizations.

Stopping the $500 billion counterfeiting industry

The globalization of trade offers unique opportunities for organized crime to engage in illicit trade and counterfeit manufacturing. Trying to increase their economic strength, they harm law-abiding manufacturers. Customers also fuel the growth of counterfeit, as they fail to resist attractive offers, e.g. a Chloé bag for a hundred dollars instead of spending a few thousand. The decline in customer buying power is another reason for the prosperity of the counterfeiting industry.

Counterfeiting tremendously impacts the manufacturers of textile and apparel. According to the Office for Harmonization in the Internal Market (OHMI), the clothing, footwear and accessories industry in the European Union alone loses approximately $27.7 billion in revenue annually from counterfeit goods. That’s equivalent to nearly 10 percent of total sales and leads to approximately 500,000 jobs being lost. The Swiss Customs Service states that 30 to 40 million counterfeit watches are put out into the market every year. Fake watch sales are estimated at $1 billion per year.

Not only does fake clothing create an economic impact, it also creates a health and safety hazard. Very often not only do the counterfeiters do very little for their products to resemble the originals, but also care very little for the safety of their use. They are usually of low quality and pose a risk to well-being. According to the U.S. Customs and Border Protection, apparel and accessories account for 15% and watches and jewelry for 13% of all the products being seized.

Making use of blockchain to solve the problem

By using blockchain, it is possible to erase the widespread problem of counterfeiting. Emercoin offers a ready-to-use solution that can be implemented by any manufacturer to prevent the counterfeiting of manufactured products.

EmerDPO Antifake is a system designed to create unique IDs for manufactured products. Such an ID can be applied to the packaging in the form of QR codes that can be easily scanned with a smartphone. Thus, customers can validate the authenticity of the products on store shelves. Records with serial numbers are connected to the manufacturer as only the owner of the private key that the manufacturer possesses can create IDs.

EmerDPO Antifake can be implemented into the existing infrastructure. It offers many benefits and is easy to use:

  1. A manufacturer produces a product and attaches labels with QR codes to the packaging.
  2. Customers in shops scan the codes with their smartphones to get information about the product.
  3. If the product is genuine, the information about the manufacturer and the item is being displayed. Should the system not recognize a genuine product, the customer is warned immediately after scanning the code.
  4. The code may contain additional information about the product or redirect buyers to a page where the product can be registered. This feature allows manufacturers to track products, get owner-related data and engage in direct communication with the customers.

EmerDPO Antifake is already successfully used by the Petrodvorets Watch Factory to store data on manufactured watches in the blockchain.

You can find out more about the benefits of using Emercoin’s decentralized technologies on our website.

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