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Fighting Counterfeits
With Blockchain

Given the huge return on investment, it's no surprise that unscrupulous operators spend a great deal of time, effort and resources to create counterfeit versions of high-end luxury products. The annual fake luxury goods market is estimated at a stunning $600 billion globally! An equally surprising 3.3% of global trade in 2020 consisted of counterfeit goods - including luxury replicas.

This scale of counterfeiting results in far more than just financial losses for customers and the brands they believe they have purchased. With it becoming increasingly difficult to tell originals apart from their meticulously created copies, the average customer pins the lower than expected quality on the brand itself. Those customers that do get the advice of experts and discover they have been hoodwinked are less likely to pay the premium for a truly exclusive product in the future. In either instance, the market for such products shrinks.

Blockchain technology has emerged as an effective way to counter the counterfeiters, by ensuring that customers are confident of the authenticity of their purchase.

Enhancing transparency and confidence with immutable records

Blockchain technology can be used to create records that all concerned parties can trust implicitly. It can record details from the origin of raw materials to the manufacturing process used, to adherence to quality control, and finally the authenticity of the product. Given these capabilities the luxury goods sector is proactively adopting the technology to ensure its customers have access to authentication, traceability, and transparency, for all aspects related to its products.

'Provenance tracking' is a term used in data management that signifies that the origin, history, and lifecycle of a piece of data has been recorded in a meticulous and organized manner. Coincidentally, the word provenance is also used in the context of heritage and luxury goods, in reference to their origins. In recent times it has expanded to include ethical sourcing, and sustainability in manufacturing as well.

Blockchain technology offers a tamper-proof and ultra-reliable means for luxury brands to give customers an insight into the process that has resulted in the creation of their exclusive purchase. In recent times, the early adopters of this strategy have added to the sense of uniqueness of their offerings by creating NFTs that become available to a customer along with the product.

Additional advantages related to high-end retail environments

The self-executing Smart Contracts made possible using Blockchain technology also have applications within the luxury brands realm. Exclusive product lines can have several types of secondary procedures associated with them, in contrast to more generic offerings. From royalty payments to certifications and compliance, all such documentation and audits can be put on a Blockchain, increasing efficiency as well as customer satisfaction.

In many niche markets that are typical of high-end retail, customers are almost like collectors - due to the highly exclusive nature of the products. A purchase in such segments is about much more than the utility of the offering. Blockchain technology adds to consumer engagement in such cases, by providing detailed and traceable records of the product’s history.

The opportunities for evolution are endless

As a Blockchain-As-A-Service (BAAS) platform Qila helps your business adopt Blockchain and crypto technologies to secure your business needs by minting non-fungible tokens, for real-world physical or digital assets, on a private Blockchain network.

Our ARK and ARK+ platforms offer easy and hassle-free Blockchain onboarding. Our PrivaSea wallet is an unimpeachable source of authenticated data that can help customers save all their critical information in a certifiable and trustworthy NFT format, in a single wallet.

Visit www.qila.io/ for a peek into a brave new world of endless possibilities, and let Qila help your business unlock the next level of growth, using Blockchain.