The spread of counterfeits and the fight against fakes in the fashion industry
Fashion industry products are the most frequently counterfeited. According to European Union statistics, the fashion industry loses approximately $12 billion annually due to counterfeit distribution. The leading categories by counterfeit volume include footwear, bags, watches, and clothing from well-known brands.
In the United States, in 2022, counterfeit footwear worth $96.7 million, bags worth $972 million, watches totaling $1.2 billion, and clothing worth $487 million were seized.
Beyond financial losses, counterfeit distribution damages brand reputation and negatively impacts the environment and consumer health. Most counterfeit products contain harmful toxins that damage the respiratory system and can trigger various musculoskeletal disorders.
This issue is no less relevant in Russia. Over the past four years, the turnover of illegal goods has reached nearly 5 trillion rubles, equivalent to 10% of the country’s total retail trade. The main counterfeit product categories in Russia are footwear, bags, watches, and clothing from well-known brands. According to BrandMonitor, counterfeit luxury clothing and footwear account for 273 billion rubles, while sneakers represent 72 billion rubles.
Detection and removal of counterfeit goods is a key challenge for resale companies, especially in the luxury sector. Without authenticators, the luxury resale industry would collapse. Resale brands are the first to implement the latest technologies for authenticating branded products.
Authentication Methods Used by Brands and Resale Platforms:
— Human Authenticators
On major resale platforms (StockX, Vestiaire Collective, RealReal, etc.), specialists undergo at least three months of training and are supervised for seven months, with additional monthly courses. In the jewelry sector, there are special identification certificates for precious stones (GRA, an international standard). New specialists often come from luxury brands or auction houses. Graduation tests require 100% correct answers.
— QR Codes
By scanning a QR code, buyers can verify the authenticity of the purchased item. Many brands now print QR codes on care labels linked to digital identifiers. When consumers scan the label, the entire product lifecycle, including the certificate of authenticity, becomes available. One challenge is ensuring that QR codes are printed on durable materials that withstand many wash cycles.
— NFT Tags
NFT tags are non-fungible tokens with unique properties. Ownership rights of NFTs can be tracked. Linking an NFT token to a physical product serves as 100% proof of its authenticity. Major fashion market players like Louis Vuitton, Gucci, Prada, Ralph Lauren, Burberry, and others use NFT tags.
Visual Recognition Using AI
- Entrupy’s artificial intelligence technology achieves 99.1% accuracy, allowing it to detect details invisible to the human eye. The system analyzes detailed images of items using algorithms trained on extensive databases of authentic and counterfeit goods. This process is fast and accurate via the Entrupy app. To ensure the highest image quality for analysis, a specialized portable device is used. It is already widely employed worldwide.
- Alitheon FeaturePrint® no-touch serialization technology will be exclusively licensed to Authentique for use in the luxury and fashion industries. Alitheon is a leading AI player in aerospace, energy, defense, and manufacturing sectors. By photographing an item with a smartphone, consumers can verify its authenticity. Using Alitheon FeaturePrint®, counterfeit and gray market goods can be identified with a single camera click.
— Authentication of Leather Goods (Footwear) by Smell
Unlike clothing, footwear production involves chemical materials with specific odors. The tech startup Osmo has introduced a smell-based authentication technology. AI sensors detect unique, subtle scent profiles that distinguish counterfeits from originals. Current experiments show that this technology can determine authenticity with up to 95% accuracy.
ANNA LEBSAK-KLEYMANS
CO-FOUNDER AND CEO OF FASHION CONSULTING GROUP