As we all know, trends come and go in fashion. But what has steadily seen an upward trend is fashion’s luxury resale market, a segment of the fashion industry that, within the last decade or so, has seen tremendous growth digitally and has sprouted many retailers.
In Singapore alone, one of the earliest online players, Reebonz, has now been joined by the likes of StyleTribute and The Fifth Collection—and they’re just at the tip of an ever-growing luxury resale iceberg. Even smaller boutiques that have been in the luxury resale business for decades have gone on to develop their presence digitally.
But just how big of a business are we talking about? In the 2019 edition of an annual report done by thredUP—an online resale business that offers a broad spectrum of fashion brands— the resale market is expected to grow to USD23 billion from 2018’s USD5 billion. That’s almost a five-fold increase within five years.
It’s not exactly a surprising figure given the climate that we’re in now. As a society, we’re generally increasingly concerned about how we’re consuming fashion and are more aware of fashion’s environmental impacts. Partaking in the resale environment allows fashion lovers to be involved in a more circular fashion ecosystem—the life of a top-quality luxury good can be extended and enjoyed by multiple subsequent owners.
And let’s face it, fashion designers have a knack for referencing the past in current works. And in some cases, they’re bringing back pieces from the archives. Nothing is new anymore.
If there’s one caveat to the luxury resale business, it’s authenticity. In a 2019 report by the Organisation for Economic Co-operation and Development and the European Union Intellectual Property Office, the trade in counterfeit products has risen and currently stands at 3.3 percent of total global trade. Of that figure, the top three industries affected are footwear, clothing and leather goods. When it comes to the luxury resale market, making sure that one is selling and buying real Gucci, Chanel or Louis Vuitton (statistically the most counterfeited luxury fashion brand) is of high importance.
The aim to ensure customers that products are authentic has driven eBay to launch eBay Authenticate in 2018. The service allows sellers to send in eligible luxury bags and wallets—from 12 luxury brands that include Louis Vuitton, Balenciaga and Hermès—to be authenticated by eBay’s industry experts. According to eBay, it’s a dependable multi-step process, so much so that buyers who purchase from the eBay Authenticate programme will get a refund at twice the amount paid if any purchase is found to be fake.
Luxury fashion brands are highly secretive when it comes to their own authentication processes. The resale market is often seen as a competitor and revealing any well-guarded secret would no doubt be aiding the enemy. Tech company Entrupy, however, seems to have cracked the code.
Using artificial intelligence, Entrupy is the only known technology that posits that it’s able to accurately determine the authenticity of luxury goods. The technology was initially created for art authentication but using the same base idea, Entrupy is able to tell fine differences between a fake and the real deal.
It does this by collecting data on authentic products from a range of luxury brands. Basically, Entrupy is an extensive data bank on goods produced by the brands and through algorithms, compares a product to information it already has to determine its authenticity. And as with every artificial intelligence, Entrupy is able to keep learning so that it keeps improving its capabilities. As it stands, Entrupy boasts a 99.1 percent accuracy rate. That’s a pretty impressive claim.
The Entrupy device is essentially an iPod that comes with an attachment. To authenticate a product, one selects the brand of the product and the material that it’s made of. Entrupy will then prompt the user to take macroscopic and microscopic images of the product. The former is taken with just the iPod, while the latter makes use of the attachment. Throughout the process, Entrupy will instruct the user to take multiple pictures of different parts of the bag—everything from the stitching to the inner lining—as well as to key in the product’s serial code. Entrupy then verifies the authenticity of the product by comparing it with the millions of images and data that it has stored.
We spoke to Vidyuth Srinivasan, the co-founder and CEO of the company, to find out more about Entrupy’s technology and, well, to find out if it’s the real deal.
ESQ: The Entrupy technology began with art authentication. How did it evolve to be used for luxury fashion?
VIDYUTH SRINIVASAN: Entrupy’s authentication solution is built on algorithms that are, in general, agnostic to the type of product on which they’re applied. While the original concept was around art authentication, as we built our go-to-market strategy, we quickly realised that the luxury space had a more impactful and identifiable need for trust and authentication.
We decided to conquer high-value luxury products as the first category for which we made the solution commercially available. We saw that there is a clear market need for one, especially as supply chains become more opaque and transactions increasingly global. Obviously brands want to protect their IP and merchants need to provide consumers with the assurance that the products they are getting are what they claim to be.
Beyond those transactional needs is the need to confront the global product-counterfeiting problem. Most people aren’t aware of just how large and damaging it is, leading to catastrophic side- effects including pollution, organised crime, child labour, human trafficking and even terrorism.
"While the original concept was around art authentication, we quickly realised that the luxury space had a more impactful and identifiable need for trust and authentication."
ESQ: The technology basically makes use of a huge database from which comparisons can be made to determine if a product is authentic. What measures were put into place to ensure that the control products were authentic in the first place?
VIDYUTH SRINIVASAN: Our system is deep-learning driven, so every data point that enters the database helps our algorithms get smarter. We started training our algorithms and collected data three years before we considered the technology to be commercially viable. During that time, there were a lot of boots- on-the-ground reconnaissance and data gathering from both authentic and counterfeit merchandise.
When we officially launched, we had a much more limited list of supported brands and styles. In fact, when Entrupy started as a paid service in February 2016, we only supported Louis Vuitton Monogram Canvas. In the past three years, we’ve done a lot of work and data gathering and are now proud to say we support a range of styles and materials from the top 15 luxury brands, and our accuracy rate is 99.1 percent. We are even more proud of our false positive rate, which is less than 0.1 percent of our overall accuracy.
ESQ: Entrupy terms pieces that do not meet its authentication process as ‘unidentified’ instead of calling them out as fake. Why is that so?
VIDYUTH SRINIVASAN: Ultimately, we’re not identifying ‘fakes’; we’re identifying authentic items. The status ‘unidentified’ signifies that we are not able to confirm that the item is authentic. We generally assume that an item not proven to be real is fake. But at Entrupy, we aren’t about making assumptions; we’re about using data to find the absolute truth.
ESQ: In Entrupy’s first State of the Fake report, it’s been highlighted that Singapore is fifth when it comes to the use of Entrupy for authentication. Are you able to share an approximate number of users in Singapore who use Entrupy and if there are partners that Entrupy works with in Singapore?
VIDYUTH SRINIVASAN: Our customers can be a single shop or a large chain with many users or even government bodies. For example, ShopGoodwill.com is a single customer, but they are using us in over 100 locations. In Singapore, one of our largest customers and strong supporters is The Fifth Collection. We also work with Maxi Cash Services, Madame Milan, Style Theory and many other well-respected businesses in Singapore.
ESQ: Luxury fashion houses are known to be very secretive regarding their own authentication processes. Why do you think this is the case?
VIDYUTH SRINIVASAN: I’m sure many are concerned that, if they give away their secret sauce, bad actors will capitalise on it. For example, if there’s a particular metallic thread or a hologram involved and counterfeiters find out about it, they’ll just replicate that effect too. One thing about Entrupy is that we’ve amassed such a huge database that it’s extremely hard for a fake manufacturer to replicate, at scale, the minute details we use to determine whether the item is authentic or unverified. In some ways, this puts us many steps ahead of counterfeiters.
ESQ: How would Entrupy fare against an experienced in-house authenticator (say for example, from Chanel) in determining if a piece is fake or authentic?
VIDYUTH SRINIVASAN: Entrupy can detect things that the human eye never could and evaluate an item faster and more consistently than a human—in just seconds. We also have a much higher degree of accuracy, at near 100 percent. Customers who utilise Entrupy are able to rely on a technology-driven authentication solution, which is not subject to human emotion, subjective standards or variable product knowledge. And with more users and more direct collaboration with manufacturers, any knowledge gap is further reduced with more data.
ESQ: With technology getting more advanced, there’s also the likelihood of there being better ways to produce higher quality counterfeit products. How is Entrupy updating itself to ensure that its reliability is maintained or increased?
VIDYUTH SRINIVASAN: Because Entrupy is built with deep- learning algorithms, it’s designed to keep improving itself all the time. With each scan, it gets better, smarter and faster. The only thing we’ve continually upgraded is the scanner itself, which we’ve made smaller and easier to use. It is possible that some counterfeiters might try and use Entrupy to improve their quality benchmark, but then so are we. The larger picture as I see it is that fighting against counterfeits is a spy versus spy game and not a zero-sum one. The goal is to be as many steps ahead as possible to prevent the fakes from even being created. AI allows you to do that.
ESQ: In today’s age, luxury fashion houses are creating newer styles season after season, especially with brands like Gucci that are not as singular as before. How does Entrupy keep up?
VIDYUTH SRINIVASAN: The Entrupy authentication system is underpinned by our large and scaling microscopic image database. Entrupy’s curated database covers decades of high-value goods across these brands’ current and back catalogues of styles and models. As new styles are released each year, we collect data from a variety of sources from around the world, including retailers and other sources higher up the value chain, which further augments the data collected from customers each time they use our service. This enables us to continually train our algorithms and broaden our coverage to popular new styles shortly after their release.
ESQ: Could Entrupy be used to potentially authenticate other fashion items aside from bags and accessories?
VIDYUTH SRINIVASAN: Yes, almost any hard physical product could be a use case for Entrupy. Liquids and reflective things like diamonds are among the few categories that Entrupy isn’t equipped to verify due to external factors like reflections. In the near future, we plan to announce verification products for new categories outside of luxury items.
ESQ: What’s the end goal with Entrupy?
VIDYUTH SRINIVASAN: Wearelookingtoprotectandencourage trust in transactions of products that are at risk of counterfeiting— both offline and online as well as across supply chains. Ultimately, we want to be a sort of Verisign for physical goods.