Beauty Industry Needs A Makeover – Blockchain Can Provide One
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Practically, everyone has had a specific reaction to a cosmetic or lotion at some point in their life. For those with sensitive skin, it’s often a guessing game trying to figure out which ingredient is causing the issue. But no matter how hard you try to find that ingredient by comparing labels, you might never know for sure.
The beauty industry has faced criticism for years due to a lack of transparency, especially in its supply chain. The products we apply on our skin—like perfumes, lotions, and makeup—are absorbed into our bodies. Unlike food and medicines, which are regulated by agencies like the FDA, cosmetics are not subject to the same level of scrutiny.
According to reports from various UK newspapers, the MHRA (Medicines and Healthcare products Regulatory Agency) receives around 300–400 complaints each year about adverse reactions to beauty products. What's alarming is that these products are sold over-the-counter without any prior review or safety testing of their ingredients.
On average, an adult woman in the UK uses up to 12 personal care products daily, exposing her body to as many as 168 different chemicals. Men use six products, exposing them to around 90 chemicals. Ensuring the safety of these products is crucial, but how can companies guarantee this? The question remains unanswered.
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Blockchain Could Be The Answer To The Significant Issues Related To The Cosmetic Industry, For Consumers And Companies Alike.
The cosmetic supply chain is notoriously unregulated. There's a big gap between when a product is manufactured and when it reaches the consumer. In the UK, issues like product diversion and counterfeiting are major concerns in the beauty sector.
Many companies rely on contract manufacturers, who then send the product to packaging providers and distributors. This is where the real problem starts. Distributors often sell to unauthorized sub-distributors, making it nearly impossible for the original company to track where the product ends up.
Is the price being inflated? Is counterfeit replacing the real product? How do you know if that Chanel eyeshadow you bought on Amazon is genuine or just going to cause an eye infection?
How Can Blockchain Help In Solving All The Problems Related To Supply Chain Management?
Cosmetic boxes come with both visible and hidden identifiers to help trace the product back through the supply chain. If a company finds that its product is being sold as counterfeit or at an inflated price, it can use these identifiers to locate the source of the problem.
Companies like Chronicled offer end-to-end supply chain monitoring, making the entire process more transparent from start to finish.
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However, problems aren’t only at the downstream; they also exist upstream, where the ingredients are sourced. A single product can have 50–100 ingredients from all over the world, yet there's often no transparency about where they come from.
For example, mica is used in cosmetics for shimmer and glitter. It's also used in car paints and as an insulator. Two Indian states, Jharkhand and Bihar, produce about 25% of the world's mica. However, reports suggest that up to 90% of these mines are illegal, with over 20,000 children working in them under terrible conditions. These children are essentially slaves, and even major brands like Audi, BMW, and Vauxhall have been linked to these mines.
How Can Blockchain Ensure A Transparent Supply Chain?
Solving child labor issues requires a multi-faceted approach. Blockchain can provide a decentralized system for tracking and accrediting sources, such as mica mines in India. Companies like Betterkinds are working on certifying sources and materials. Even if only 10% of mica mines are legal, blockchain can help identify and track them throughout the supply chain.
Why Are Big Corporations Failing To Live Up To The Mark?
Contrary to popular belief, large corporations often lack control over their suppliers. Suppliers dictate most processes, and while some companies set high standards, they’re left with poor options. Once a material is deemed essential, the only question becomes how to obtain it.
What makes things worse is that many supply chains, including those in cosmetics, are outdated. They rely on paper invoices and money wires, which contribute significantly to the problem.
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Solution:
Technology like AI and machine learning is still new to the cosmetic industry, but it's slowly driving digital transformation. This shift will make things easier for consumers, who now expect nothing less than convenience and transparency.
Corporations need to invest in robust systems that meet all supply chain requirements. Integrating outdated and inefficient systems across the globe is essential. A backbone for information sharing and product tracking is needed. Blockchain offers the solution to every broken system and seems to be the only viable option for today’s complex supply chains.
Taking cosmetic brands online helps them grow both commercially and technologically. It gives them access to a global consumer base and a better understanding of what customers want. Technology has transformed almost every industry, and it's time it revolutionized the beauty sector from top to bottom. Many cosmetic brands are showing a renewed interest in embracing technological change, which is long overdue and bringing new life to the industry.
