Blockchain is changing the future of the fashion industry

Blockchain is changing the future of the fashion industry


Blockchain traceability is a promising solution to change the fashion industry in the near future

The global blockchain technology is projected to be 57.6 billion USD by 2025, with CAGR 69.4% from 2019 to 2025. Small and medium enterprises segments have widely adopted Blockchain in Asian Pacific due to the increasing demand for streamlining business processes cost-effectively. According to Reportedlink, the CAGR for this segment is 70.7% from 2019 to 2025. 

On the other hand, Blockchain application is not only applied in finance and transaction but also other fields such as supply chain, manufacturing, education, healthcare, asset management, and data digitalization. Deriving from finance application, the application of Blockchain has vigorously spread to other industries that have faced the problems causing by lacking transparency and trust. 

Take the apparel supply chain as an example; the market capitalization for it is about 1.9 trillion USD in 2019 and projected to reach 3.3 trillion USD by 2030. The apparel supply chain is facing challenges in delivering high-quality products to the customers while maintaining and enhancing the positive impact on social, environmental, product quality, and supply chain efficiency.


Most of the garment factories in the world are in developing countries in South East Asia and the Middle East region due to young populations with high productivity and low labor costs. Therefore, it is easy to understand why all the famous fashion and footwear brands place their factories there. However, many social issues happen in those factories like the problems about worker health and safety, human trafficking, paying below minimum wages for workers, child labor. These social issues can blow out the reputation of enterprises or even get boycotted from their customers. For instance, Nike was in trouble of being boycotted by customers because one of their intermediaries in Pakistan using child labor in a low-safety working environment and affect negatively on their brands. Later, Nike had to stop working this intermediary and promise to control their intermediaries tightly on preventing social issues.

Environmental is also a challenge in the apparel supply chain. Enterprises in the fashion industry have to take care of the environment not only because of the pressure from the governments but also from the demands of consumers. According to CFG x Futerra, 55% of surveyed consumers want to know more information on social, health, environment, and safety issues of the products before buying. Therefore, enterprises who make no harm to the environment and provide consumers with proof of protecting the environment will gain competitive advantages in the market.

The apparel supply chain is facing problems with counterfeit products, spurious or inferior raw materials with low-quality products that have the presence of harmful chemicals. Every year, the fashion industry losses 323 billion USD due to counterfeit products. Especially in the EU, there is about 10% of sales and thousands of jobs lost due to fake products and brands. Besides, poor product quality may cost the brand 20% of sales and more. Consequently, a brand that doesn’t have sufficient quality management will incur unexpected costs on chargebacks, product returns, and lost current and potential customers. Hence, the brand that the company has attempted to build years by years can be collapsed if that company doesn’t focus on their product quality and safety for customers.

The fashion and apparel industry is suffering bad results from the fake goods problem.

Blockchain is changing the billion-dollar industry

To solve the problems of social, environmental, product quality of the apparel supply chain, enterprises should have comprehensive information flow to control over their supply chain. Complete information flow is the way an enterprise collects and stores all information effectively and adequately for managing purposes with consistent updating from all supply chain stakeholders. Seamless information flow can help a brand increase visibility throughout all activities in the supply chain, control their intermediaries and stakeholders tightly. Traceability is the solution for the information flow in the supply chain. 

Traceability is the ability to track and trace production elements from raw materials to finished products sold on the retail shelves. Stakeholders have to provide information about the product at every step in the supply chain to the traceability system. Therefore, supply chain managers can quickly identify the current status of the products and retrieve the history of the product journey. This information must be available for the businesses joining in the supply chain, consumers, and government agencies to access. Thus, everybody can know how the product was manufactured, whether it followed the policies and regulations about the environment, social protection, and obtained product quality standards.

Traceability offers the ability to investigate and troubleshoot issues related to a component or ingredient. Brands can boost their brand image by showing customers the proof that their products are friendly to the environment, customers’ health with high quality and commit not to violate policies on labor and social. Additionally, the data from a traceability system can help companies optimize business processes, supply chain management strategies, and efficiencies. To get all of these benefits, the input information has to be transparent. This is the shortfall of current traceability solutions because the input data can be changed or deleted. Accordingly, the traceability is distrustful and raise a concern in data security for businesses who intend to apply traceability. That’s why traceability needs to apply Blockchain to solve these shortfalls.

Facing the strong impact of technology, apparel companies are trying to transform their business models. Take Nike as an example, they are no longer positioning themselves as a garment company. Instead, they talk a lot about themself as a technology-fashion company. Many products of Nike including clothing, shoes … have sensors that measure heart rate, the number of kilometers runs or calories burned. Obviously, when the industry “evolves” in terms of technology, it will need Blockchain.


Blockchain traceability is the focal point in the Growing Local Industry Through Sustainable Fashion event held in Malaysia. WOWTRACE, an innovative startup specializing in researching and developing Blockchain-based traceability solution, has demonstrated the prominent characteristics of Blockchain traceability in the event. 

WOWTRACE solution identifies apparel products uniquely by unique ID on Blockchain and QR codes. This helps the company and consumers track each item individually. In the fashion industry, especially in high-end fashion products, identifying each item is very important. This way helps the company ensure each item has the same quality and meet the standards before dispatching from the factories. Also, it’s an effective way of preventing counterfeit products. When each item has its unique ID and information about the product journey, the imposters can not fake the information. Moreover, the ID and data updated on Blockchain enhance the possibility of stoping counterfeit. Because there is no duplicated information of items, and the information is updated by many individual stakeholders throughout the supply chain immutably and undeniably.

WOWTRACE is honored to be mentioned on EDISI7 Malaysia

Furthermore, to prevent the situation that imposters copy and clone the QR code, the WOWTRACE solution also combines traceability via codes with other means of tracking such as NFC, RFID. Based on the cryptography of Blockchain, WOWTRACE has a comprehensive solution to protect traceability data from fakers and ensure data integrity. The transparent, immutable, and undeniable information of Blockchain makes every party joining in the apparel supply chain commit to taking full responsibility for ensuring quality, safety for customers, protecting the environment, and social community. 

“WOWTRACE solution is developed on Blockchain platform to help businesses increase transparency, visibility, and efficiency in managing their supply chain. In the apparel industry, the solution of WOWTRACE also helps businesses prevent losses due to counterfeit products. WOWTRACE uses Blockchain in combining with other traceability and anti-counterfeit technologies like QR code, NFC, RFID to identify each unique item. For instance, if a consumer uses WOWTRACE to track product information via the QR attached to fake products, he will receive no information about the products and identify this product is counterfeit. Therefore, it leaves no room for imposters to fake the product and traceability information like what they did.” – Mr.Nguyen Duc Phuong Nam, Managing Director of WOWTRACE.

Mr.Nguyen Duc Phuong Nam – Managing Director of WOWTRACE spoke at Growing Local Industry Through Sustainable Fashion event

Blockchain traceability solves mosts of the problems in the apparel supply chain causing from lack of transparency, trust, and management ability of businesses. To develop sustainably, brands must commit to ensure and enhance product quality together with protect the environment and follow social responsibility. Therefore, applying innovative technology to manage and increase efficiency is the priority that a business needs to focus to gain competitive advantages.


WOWTRACE is a completed ABCD (AI, Blockchain, Cloud, Data) Traceability Solution that brings sustainable growth and transparency to the supply chain across Asian countries. Thereby, all stakeholders achieve end-to-end visibility and control over their operations on the supply chain.

Learn more about WOWTRACE at:


Source: Nhip Cau Dau Tu
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