Keywords: Counterfeit Product with Blockchain

Smart contracts on Counterfeit products

Traceability in Counterfeit Products

Blockchain in retail

Preventing Counterfeit Product with Blockchain

Counterfeit Goods with Blockchain

Reference Links:

https://www.vox.com/the-goods/2018/10/18/17989610/blockchain-retail-counterfeit-supply-chain-data

Title: Retail Industry Turns to Blockchain

Many companies in the fashion, food and retail industries are putting their products on blockchain. Blockchain
in retail might not be something you even notice. All retail companies are in fact looking into blockchain to see
how a distributed ledger system can help their business. Blockchain in retail could help solve many problems in
the industry. Many companies have already begun initiatives that are underway.

Blockchain, famously known for bitcoin, can be much more than just a way to keep track of coins. Preventing
counterfeit product with blockchain is already being tested within the fashion industry. The retail industry isn’t
far behind. Blockchain is a method of storing data. It is like a sequence of records being shared by people along
a large network that can be both accessible and immutable, which means no authorized persons can change or
delete a record without making the rest of the data in the sequence invalid. Many still think of this definition of
blockchain to be narrow. The point remains that blockchain enables a business to create a ledger that can be
difficult to manipulate or tamper with and easy to verify.

Blockchain in retail comes in handy when we look at traceability in counterfeit products. For example, a retailer
might want to maintain ledgers via blockchain to track the end-to-end movement of a product in the supply
chain. They might want to even track inventory and prevent counterfeit product with blockchain. However, to
make this happen, everyone in the supply chain from the factory to the distributor to the shipper to warehouse to
store, needs to be a part of the digital ledger. Otherwise, it simply won’t work as there will be gaps in the data of
the product’s ledger. Then, when an item is tracked in the warehouse or placed on the shelf or scanned for
pricing when selling to a customer, it could be bundled after validation along with other data about the item in a
block. This block would link to other blocks to form a blockchain.

This data can be stored anywhere, across multiple devices or nodes, which will in turn create a decentralized
system that discourages hacking. What if the suppliers are spread around the world, though? What if they are
still using paper spreadsheets or difficult software to manage their shipments? All of this sounds complicated,
but if the retail industry wants to save billions of dollars, it becomes less a question of if blockchain will be
implemented than when and how it will be implemented.

One of the biggest problems in retail is to know where the inventory is at any given point, whether it is in the
supply chain or in the store or online. Matching this inventory to the right customer after tracking it is another
challenge. Logistics firms and retailers can use blockchain to solve both problems. Even solving the first
problem would mean millions of profits for the industry as companies would then have better control over their
shipments and what products go on their shelves. Customers too could profit as they wouldn’t have to visit the
store and find out the product they came for isn’t on the shelf. Retailers would benefit from this scenario too as
it means fewer frustrated customers. Blockchain will also make it easier for shops to know what they have in
stock.

Out-of-stock scenarios cost retailers about $1trillion a year globally. With blockchain there to track products in
the supply chain, there would be improved inventory visibility and more transparency. So, suppliers and
retailers can be on the same page when it comes to tracking the progress of shipments and knowing when
products need to be replenished. Blockchain increases transparency, accountability and updates all parties with
accurate and the latest data. However, all people in the supply chain need to apply blockchain to their practices.
The biggest hurdle though, for blockchain to be applied at such a level is that the system has to be uniform and
resistant to counterfeiting through QR codes for example. The types of methods used in blockchain differ based
on the product being tracked where tracking RFID tags can be costly because they are attached to individual
products rather than entire pallets or stock.

It is not just important to know where the product is in the supply chain at any time. It is also important to know
the source of the product. Imagine there is an E.coli outbreak in the production of romaine lettuce. Blockchain
will be able to find out safely where the product comes from within 2.2 seconds as opposed to hours or days.

Another sector of retail industry is the luxury goods which are prone to counterfeiting. Traceability in
counterfeit products becomes possible with blockchain. The cosmetics industry is suffering from counterfeit
products and facing huge losses due to the same. Counterfeit cosmetics are also a reason for rashes and other
ailments among customers which leads to loss of reputation. Counterfeit cosmetics are even ending up on
marketplaces like Amazon which is a huge problem. Customers could be getting fake or expired products.
Cosmetics industry does not have anything in place to find out of their products are getting diverted – a harmful
and illegal practice. They have to go around and inspect and scan the products to really find out. If they instead
track using blockchain and integrate all their systems to a blockchain platform, once the cosmetics item leaves
the packager and goes to the first distributer, all events will become recorded and during investigation it
becomes easy to find out when the product became diverted.

Even though blockchain can help with so many problems, there is a lack of standardization problem in
blockchain. This poses a big problem for the technology industry. One that all in the technology sector must
come together to solve.