Dive Brief:
- Entrupy has launched a fingerprinting solution to counteract the growth of counterfeit products, according to a press release. The company's company's tech uses computer vision techniques, artificial intelligence and machine learning to verify the authenticity of designer and luxury goods through a fingerprint-like match stored in the cloud.
- The Entrupy Fingerprinting system, which relies on a mobile app, has been tested by an upscale retail chain in the United Kingdom. The retailer, which Entrupy did not identify, used the system on high-value goods to prevent returns fraud. Verify returns instantly at the point of intake expedites returns and detects if a replica product has been substituted, according to Entrupy.
- The company said the system has been tested in diverse categories, including apparel, cosmetics, luxury goods, electronics and industrial parts. Brands currently authenticated include Balenciaga, Bottega Veneta, Burberry, Celine, Chanel, Chloé, Coach, Dior, Fendi, Goyard, Gucci, Hermès, Louis Vuitton, Prada and Saint Laurent, according to Entrupy's website.
Dive Insight:
Retailers and the technology providers servicing them are looking for innovative ways to combat the worldwide epidemic of counterfeit goods.
How big is the counterfeit problem? Trade in pirated and counterfeited intellectual property accounted for $461 billion in 2013, or about 2.5% of all trade, according to the International Trademark Association. By 2020, the figure could reach nearly $1 trillion, the association said. These numbers were corroborated by a report from online intellectual property technology firm Red Points, which cited statistics from The Organisation for Economic Co-operation and Development that said the global trade in counterfeits is worth an estimated half a trillion dollars and is projected to reach $1 trillion by 2022.
But the story gets worse: 20% of consumers surveyed admitted to buying counterfeit footwear online. Almost 70% of those who bought counterfeits were satisfied with the footwear to some extent, and 49% said they would buy the counterfeit shoes if presented with a big enough discount. About 80% said they were confident in their ability to spot counterfeits, but 37% were indifferent to the problem. Counterfeiting has been a major problem for Amazon, eBay and Alibaba. Jack Ma, founder and executive chairman of Alibaba, has called counterfeits the "cancer" of the Chinese e-commerce site.
As Entrupy CEO and co-founder Vidyuth Srinivasan put it in the release, "As commerce has become more global, it's harder for brands and retailers to keep on top of their supply chain, and anytime they lose visibility, the risk of corruption emerges."
Entrupy isn't the only firm looking to tackle the problem. For example, RepairClinic, a provider of parts for appliances, HVAC systems, lawn equipment and outdoor power gear, has rebranded itself and launched a new website as part of its efforts to combat counterfeit parts
Last year, Entrupy reported on its paid service which uses a portable scanning device to detect fake designer hand bags. As of May 2017, the company had 130 clients and a 97.1% accuracy rate, Srinivasan told CNBC. Currently, the company has predicted the correct authentication result 98.1% of the time, with the number of counterfeits it has missed at less than 0.1%, according to Entrupy's website. The fingerprint cloud technology is another advance.
