Watch Now


Fashion supply chains can reduce counterfeiting and power inequality by adopting blockchain

Counterfeit Louis Vuitton handbag caught by U.S. Customs (Photo: U.S. Customs and Border Protection)

The fashion industry’s supply chain makes for an interesting study. Though not too different from the supply chains across other segments in the context of complexity or opacity of operations, the fashion industry has frequently contended with issues like labor inequality and proliferation of counterfeit items, especially with regard to established brands in the ecosystem. 

For instance, take the case of the global apparel market that accounts for $1.3 trillion in retail sales annually. Much of this industry in the developed nations is sustained by exports, with products usually being manufactured across China and countries in the Indian subcontinent and southeast Asia. 

Several reports have pointed fingers at the unethical practices followed by fashion brands, in which they extract work from impoverished workers for wages of less than $1 an hour, while selling the finished products at a considerable premium across outlets in the West. Though consumers are increasingly becoming wary of pay inequality and are forcing brands to be accountable, there are not many effective ways to ensure businesses do not continue exploiting their vulnerable workforce. 

Blockchain can help solve this predicament, as it can throw fashion supply chains open to all relevant stakeholders within its network, letting them gather information on essential parameters concerning operations, while having a window-seat view to the manufacturing, packing and distribution of products. 

Being a decentralized and immutable ledger, blockchain circumvents the issue of power centralization, which has traditionally weighed down supply chains and led to intermediary stakeholders awaiting instructions from the central command. Decentralization helps, as it allows every member to access and monitor records. With the records also being immutable, blockchain essentially makes editing or replacing of records impossible for any single entity. 

Immutability works out well within fashion supply chains, paralyzing bad actors from injecting counterfeit products into the value chain. Fake goods are a debilitating problem within the fashion industry, as about $450 billion worth of fashion-related products were identified to be counterfeit last year. With the visibility that blockchain ushers into the landscape, stakeholders can now have more trust in the system and can help reduce excessive red tape at nodal points – leading to significantly improved customer satisfaction. 


Several companies are already taking an interest in improving the situation by developing blockchain platforms and end-consumer applications to induce visibility in the industry that has long been considered operationally opaque. For instance, New Balance, the sports footwear company, has introduced a blockchain application that allows users to verify the provenance of all the shoes in its inventory. 

Blockchain can also be extremely effective in solving waste in the fashion industry. The industry grapples with excessive waste, not just during the manufacturing phase, but also due to the obsessiveness of businesses to hold on to their lofty brand image. Brands routinely destroy unsold but completely well-made fashion products by the end of the season, citing the need to keep the brand desirable amongst its target audience.  

With the greater visibility brought about by blockchain, consumers can understand the amount of waste within the fashion industry and can question the conscience of brands, which can possibly claw back on the waste. Reducing waste not only makes the brands more sustainable, but redirecting unsold items to the secondary market could also help trickle-down fashion to other sections of the society.