The global trade in counterfeit goods is staggering, with estimates ranging from $1.7 trillion to $4.5 trillion annually. Combine this with the $120 billion secondary market in fashion and accessories, and the critical need for authentication to protect brands and consumers becomes evident to all involved.

In a recent development, Entrupy, an artificial intelligence-powered authenticator, was announced as the chosen authentication provider for pre-owned luxury handbags on TikTok Shop in the United States. Utilizing a blend of AI and microscopy, Entrupy offers a unique solution to assess the authenticity of luxury items. When an item is scanned using the proprietary device and app, a series of microscopic images are captured. Subsequently, machine learning algorithms compare these images against a database containing millions of records of known authentic and counterfeit products.

The AI system then provides a verdict, either confirming the item’s authenticity or returning an “unverified” result. With each scan, the Entrupy device contributes to this database, continuously enhancing the algorithms and increasing the system’s accuracy. The authentication process typically takes between three and five minutes, but in some cases, it can extend to an hour, with Hermès Premium items requiring up to 24 hours for thorough validation.

The effectiveness of AI in this domain hinges on the quality of data fed into its algorithms. Entrupy collaborates with data scientists, engineers, and research experts who provide real-time information to support the authentication process. Since its launch in 2012, Entrupy has accumulated data to inform its algorithms, achieving an impressive 99.1% accuracy rate.

TikTok seller Kimmiebbags embraces this integration, stating, “Now anyone shopping through my page will trust that their purchases are authentic.” Entrupy’s founder and CEO, Vidyuth Srinivasan, underscores the importance of this integration, aiming to ensure a smooth luxury shopping experience and protect both businesses and consumers from counterfeit items.

While applying authentication technology to the secondary market offers a swift solution, luxury brands are adopting a long-term strategy by integrating anti-counterfeiting measures at the source. The Aura Consortium, comprising founding members like LVMH, Prada Group, OTB, Mercedes-Benz, and Richemont Group’s brand Cartier, is at the forefront of this movement.

The Aura Consortium focuses on pre-verifying luxury items and placing garments, accessories, and jewelry on the blockchain at the point of creation. Each item is assigned a unique digital ID, verifying its authenticity. These digital IDs also offer additional benefits, such as providing information about the item’s origin and manufacturing process for transparency and traceability. Encoded immutably via blockchain, these IDs are linked to the physical items through near field communication (NFC) chips for products like Margiela accessories or quick response (QR) codes for items like Loro Piana knitwear.

Importantly, these digital certificates can be transferred when the goods change hands, providing assurances for purchasers in the secondary market. This multifaceted approach is reshaping the luxury market, bolstering consumer trust and safeguarding brands against the pernicious effects of counterfeiting.

By Impact Lab