How can encrypted microchips help eliminate the problem of counterfeit luxury goods?
High Levels of Counterfeiting
The global counterfeit fashion market is a 600 billion dollar industry. Footwear is the most commonly counterfeited good—accounting for roughly 40% of the problem.
Difficulty Identifying Counterfeits
Complicity among overseas manufacturers has created a grey market for counterfeit footwear. Unsancationed factories can bypass costs like the original design, research, marketing, regulation, and most taxes.
Risks to Brands
Counterfeits resulted in a €26.3 billion loss in sales for the footwear, clothing and accessory sector in the European Union alone. This accounted for about 10% of their total sales. Uncertainty about the authencity of a product also erodes consumer faith and prestige causing an additional slide in sales.
Risk to Consumers
Consumers risk the frustration and embarassment of being sold false goods. The author of the article “How Wearing Fakes for 30 Days Drove Me Into a Deep Depression” talks about how he felt “whole new levels of shame and embarrassment” during a month when he wore only fake Yeezys. He details all the stares, secretive photos and other forms of humiliation.
Counterfeiting is difficult to punish through law
Michael Jordan recently lost a case against a Chinese basketball shoe company, Qiaodan (the Chinese translation of Jordan’s name). A lawyer in support of Jordan’s plea said: “The average consumer assumes that is Michael Jordan's own sportswear brand. Many of Qiaodan's shoes look like Nike Air Jordans, down to the logo”. The Chinese Supreme court approved Qiaodan’s legitimacy on the grounds that "Jordan" is a common American surname and the logo is simply a silhouette with no defining facial features.
Chronicled's Open Source platform allows developers to build apps that connect with microchips to create new engaging experiences for consumers.
Build brand loyalty by creating a community of product owners.
Word of Mouth
Encourage consumers to share their purchases on social media.
Interact with product owners directly through notifications.
Build unique experiences like exclusive photo filters, stickers, promotions, deals, events.