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SHANGHAI-Imagine scanning a jacket with a smartphone to watch a video.

That was the scene at the spring presentation of Babyghost, an indie fashion label based in Shanghai and New York with an effortless, urban vibe. The clothes, unveiled during Shanghai Fashion Week in October, were embedded with chips that could be scanned with smartphones to reveal exclusive content, like videos featuring the brand’s “street kids”, or influencers.

Blockchain technology can help luxury brands to fight counterfeit products but Babyghost, launched six years ago by DVF alum Joshua Hupper and designer Qiaoran Huang, is using it as a next level marketing and customer relations tool.

If people are familiar with blockchain at all, it’s usually because of its role as a building block for digital currencies, such as bitcoin. In short, blockchain is an eco-system capable of recording and storing a unique digital coding of any product or content, whether it’s bitcoin, a handbag or social media marketing campaign.

A physical fashion product may have its unique identity stored in a QR code, or encrypted chip embedded into the product itself, either of which can be scanned and verified on the blockchain network. Radio frequency identification [RFID] chips have already been adopted by luxury brands such as Salvatore Ferragamo and Moncler, but embedded blockchain chips offer brands far more than simply authentication. Babyghost, with its ever-growing band of female millennial consumers, was quick to embrace social media platforms like Instagram and push out images and videos of Chinese It Girls like Ju Xiaowen and Liu Wen wearing its clothing. But Hupper was eager to take the brand to a new level from a technological standpoint.

“[Babyghost is] more of a community of people that wear it and Instagram and WeChat can only offer so much, I’m bored with it to be honest,” he said.

So it was with interest that Huang and Hupper met with Shanghai-based blockchain company Bitse last summer, to discuss the potential for its VeChain (the name is a shortening of “verification blockchain”) product for fashion brands.

“I’ve been interested in bitcoin since its inception, and our first conversation with VeChain happened when the Pokémon Go thing first came out, and the initial idea was that maybe you could collect the clothes and unreleased digital images or content like they were Pokémon,” Hupper said.

Bitse’s co-founder Sunny Lu is a former chief information officer of Louis Vuitton China and was immediately drawn to fashion industry uses for blockchain when he first heard about the burgeoning technology back in 2013.

“Anti-counterfeiting was the first step, but after a few months we started looking into other things. By building this unique ID for each product, you can do a lot of things with it,” Lu said.

“I can make an announcement to the network to say, I have ownership of this product, I own this bag or wallet, this is a key feature. We can put the chipset into the clothes and they are already in built with a story. This is about making each product unique and giving unique experiences to the clients.”

Multiple parties can contribute information to the encrypted chips, so for example, a raw materials manufacturer might be able to document the lifestyle of the cow that a particular piece of leather came from, manufacturers can add chapters to the story of how the leather was treated and a product constructed, then the finished product can be followed through the logistical chain to the hands of a consumer, who can claim ownership – whether the product is purchased from a store or on the second-hand market.

“For fashion and luxury, every brand wants to use their communications and or the product to connect with the customer. Most successful brands have done this successfully by utilizing Internet technology, but how do you go the next step, beyond apps, websites, social network platforms? The next step is developing individual connections between products and consumers,” Lu added.

Hupper highlighted the potential for brands to use the technology to continually update the information they provide to customers.

“More recently, we realized the content embedded in the blockchain can be updated, so you can scan your coat next month and it will bring up a new way of wearing it. Imagine being able to constantly educate your customer with a fresh way of looking at the same garment. This is the coolest wearable tech in history,” he said.

As the world’s capital of counterfeiting, it seems both counter-intuitive and sensible that China should be at the forefront of anti-counterfeiting technologies. And as the country where bitcoin has been embraced more enthusiastically than elsewhere and digital payment systems are the norm, perhaps it’s not a surprise that blockchain and other near field communication (NFC) technologies are taking off here.

In fact, blockchain is seen as such an important technology in China that the central government signaled it out as an area for development as part of its 13th five-year plan, which took effect last year and lasts until 2020.

“I think it’s huge, the amount of money that’s going into blockchain at the moment, it’s just incredible. There’s a tremendous amount of investment and the government has been really supportive,” said Zennon Kapron, founder of research and consultancy firm Kapronasia.

Even compared to a year ago, Sunny Lu and Bitse are finding a much more receptive audience to their products, as blockchain enters what Zennon Kapron dubs the “sexy new technology” section of the hype cycle.

“People are now chasing after this technology, they might not understand what they want to do with it, but they want to know what they can do with it,” Lu said.

“Before, [luxury brands like Louis Vuitton] could tell one story to everybody and then cross their fingers and hope that it impacts a certain percentage of the people hearing it. The next step is about brands interacting one-on-one with the client, blockchain can really help achieve this.”