Australian product authenticity provider YPB Group (ASX: YPB) will incorporate its anti-counterfeit thread with invisible tracer technology into the clothing labels of two major shirt brands produced by Chinese manufacturing giant Esquel Group.
The $21,000 deal will see the threads sewn into the labels of products made for a “household name” brand in an effort to improve customer recognition of authentic items and protect against the possibility of counterfeiters churning out fake or lookalike products.
Cotton shirts are believed to be among the world’s most counterfeited items, damaging sales revenue opportunities for brand name companies as well as reputation for quality and consumer trust.
YPB anticipates further orders based on unit volumes and believes Esquel’s other brand clients will eventually adopt the same approach to anti-counterfeiting.
Esquel is one of the world’s largest manufacturers of woven garments, producing about 100 million items per year.
The family-owned business was founded in 1978 and has facilities in China, Malaysia, Mauritius, Sri Lanka and Vietnam.
It has over 57,000 staff worldwide and manufactures for brands such as Hugo Boss, Lacoste, Brooks Brothers, Polo Ralph Lauren, Tommy Hilfiger, J Crew, Anta, Nike and Muji.
YPB is currently the only company in the Chinese market which can provide anti-counterfeit thread technology.
Brand name clients are able to use YPB’s scanner to detect whether or not the thread is present in each shirt’s label, providing the brand with the ability to identify counterfeit products and confirm authenticity throughout the supply chain through either stocktake processes or simple spot checks.
“Our [tracer thread] can halt counterfeiting in its tracks and brands are progressively seeing the value in adopting our solutions to assist them,” said chief executive officer John Houston.
“Working with Esquel gives us potential access to hundreds of major brands – [the company] is one of the best distributor partners we could hope for in the garment industry.”
A growing problem
The counterfeiting of consumer goods has become a global pandemic.
The market for fake clothing, textiles, footwear, handbags, cosmetics, and watches alone, amounted to almost $670 billion in 2017 and shows no sign of slowing.
Figures from the International Chamber of Commerce estimate the cost of the counterfeit market will reach $6.06 trillion worldwide by 2022, putting around 5.4 million jobs at risk.
At midday, shares in YPB were 12.50% higher at $0.009.