The global trade in counterfeit products is close to half a trillion dollars annually. What’s even more surprising is the fact that it’s spread across all the product segments. China stands atop in fake goods production, accounting for up to 63% of the entire fake product sale. In addition to the global consumers that suffer in the hands of these products, the local Chinese customers fight counterfeiting every single day, with fake food being the worst of them all.
Blockchain technology has stepped up to this challenge. Some of the top retail and online shopping brands are already experimenting with blockchain technologies to track their shipments. At least 9 major retailers and food giants are working with IBM to introduce blockchain within their supply chain. Some of the names include Walmart, Unilever, Nestle, Kroger, Tyson Foods, and Dole. Walmart has already conducted two pilot runs using the blockchain technology. In one case, Walmart was able to track pork’s supply chain in a matter of seconds, a process that otherwise takes up to 26 hours, with blockchain technology.
Water is another product facing large-scale counterfeiting. China is the largest market for packaged water, ahead of the U.S, valued at $16 billion in 2015. A growth in income level, water pollution levels, and health awareness among the Chinese customers has catalyzed the bottled water industry in the country. A high level of water pollution in its urban areas has left little to no choice for the residents. Nearly 70% of the local water bodies are polluted, and the tap water supply is undrinkable without boiling it first. Altogether these factors have triggered exponential growth in the Chinese bottled water industry. The Chinese water market is likely to grow another 58% through 2019. In addition to the regular packaged water, the premium water segment has grown manifolds over the last couple of years, with its consumption in 2015 reaching 520.6 million liters to 45.7 million liters in 2013.
Baikalika, a premium water producer, is one of the players using blockchain to verify the authenticity of their bottled water. The company extracts water directly from the core of lake Baikal, a UNESCO heritage site. Baikal lake’s core contains ideal drinking water, having a high dissolved oxygen content and perfect mineral balance. Its premium quality has attracted fake producers from all around China, ready to cash-in its brand value.
How Blockchain Helps in Controlling Counterfeiting
Blockchain uses its transparent structure against counterfeiting. All the details of the product are uploaded in publicly distributed ledgers, allowing customers to access information easily. They can access production records, transit history, and even storage details of the product.
The product manufacturers can provide details in the form of a QR code on their product. A simple scan of the code will display every single detail about the product. Blockchain has multiple uses in addition to identifying a product’s authenticity. Major retailers are ready to use blockchain for purposes such as supply tracking.
Baikalika is printing QR codes on their water bottles, allowing customers to check its authenticity. The premium water supplier has plans to grow it production capacity to 160 million liters of water through 2020. Baikalika already has a production facility at the shores of Baikal lake, bottling up to 8 million liters of water annually. The company is planning to raise financial resources for development through an ICO.
Baikalika’s token pre-sale will start on February 12, 2018, followed by a crowdsale that starts on March 20, 2018. Each token will entitle token holders to 1,200 liters of premium Baikal water, delivered over a period of 50 years. Baikalika has mentioned a business model for investors planning to jump in the premium water segment. Its primary target markets include China, Southeast Asia, and the Middle East.