Luxury brands embrace DNA technology in fakes-ridden China; Chanel announced recently that it has a unique coding method to control the production process for its handbags and the codes are incorporated into a fluorescent card, which accompanies every handbag on the shelf

Luxury brands embrace DNA technology in fakes-ridden China

Staff Reporter, 2013-04-07

The world’s leading luxury brands have resorted to cutting-edge anti-counterfeiting technology to combat the rampant proliferation of fakes in the Chinese market. Counterfeit products have upped their tactics with similarly advanced technology, making it has become increasingly difficult to crack down the products.

Chanel announced recently that it has a unique coding method to control the production process for its handbags and the codes are incorporated into a fluorescent card, which accompanies every handbag on the shelf.

The anti-counterfeiting method is easy and clear for consumers but is still easy to be cracked. As a result, branded suppliers have strived to achieve breakthroughs in anti-counterfeiting technology, notably DNA-based technology, which includes DNA anti-counterfeiting ink, DNA anti-counterfeiting labels, and a DNA anti-counterfeiting chips.

“It is very difficult to crack DNA-based information, which will entail a big investment in time and costs on the part of counterfeiters,” remarks Mike Hayes, president of DNA Technologies.Stussy was the first luxury brand to embrace DNA-based anti-counterfeiting technology, in order to disable the extensive counterfeiting of its sportswear, which is very popular among young people. It is very easy and cost-effective to add DNA information to anti-counterfeiting labels and virtually impossible for counterfeiters to crack the code before the code is changed.

During the Sidney Olympic Games in 2000, the organizer implanted DNA information from famous athletes into the anti-counterfeiting labels of souvenirs, successfully slashing the counterfeit rate to 1%, compared with 40-50% from the previous Olympic Games.

Global Entrepreneur magazine points out that although it’s very difficult to duplicate DNA information, the major difficulty for the extensive application of DNA technology is detection. However, the technology is irrelevant to common consumers, since it will take at least two hours to verify the authenticity of the DNA information.

At present, DNA anti-counterfeiting technology must be utilized along with optical technology and ink. Still, in view of the huge potential in the Chinese market, DNA Technologies launched a Chinese-language website last year, as a prelude of its foray into the market, especially in the fields of high-end clothing and luxury products.

According to a recent report from the Boston Consulting Group, China now accounts for 40% of the global consumption of luxury goods and will become the world’s largest luxury product market by 2015. The outlook, though, is clouded by the prevalence of numerous sophisticated counterfeit products. “We are persuading our customers to upgrade their anti-counterfeiting technology to DNA technology,” says Mike Hayes of DNA Technologies.

DNA Technologies is facing some rivals, including Applied DNA Sciences of the US and Biewell of Taiwan. Major DNA firms intend to embed DNA information in the materials of products, not just labels, according to Hayes.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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