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Blockchain Helps Combat Counterfeit Cosmetics05/15/2026

(ndachain.vn) In 2025, market surveillance authorities handled more than 23,000 cases involving counterfeit and goods of unknown origin, with cosmetics among the most prominent categories. As Vietnam’s cosmetics market is projected to reach USD 3.5 billion by 2026, applying blockchain technology to combat counterfeit cosmetics is no longer a luxury option but a necessary infrastructure layer to rebuild consumer trust. This article analyzes why blockchain-based traceability on a national platform can help Vietnamese enterprises regain market share, protect consumers, and meet export requirements.

Counterfeit Cosmetics: The hidden wave in a USD 3.5 Billion market

According to industry reports, Vietnam’s cosmetics market grows at an average rate of 6% per year and is expected to reach USD 3.5 billion in 2026. However, only about 10% of that market belongs to domestic enterprises. The rest is shared among officially imported products, hand-carried goods, loosely managed OEM products, and most concerningly, counterfeit and imitation goods.

At the beginning of 2026, Ho Chi Minh City launched a large-scale campaign to crack down on counterfeit cosmetics and tighten control over livestream sales. Simultaneously, the Ministry of Industry and Trade established seven inspection teams to combat counterfeit goods during the Lunar New Year of Binh Ngo 2026. The Ministry of Health launched a peak campaign against counterfeit drugs and cosmetics, requiring reviews of e-commerce platforms such as Shopee, Lazada, Tiki, TikTok Shop, and social media platforms including Facebook, Instagram, and YouTube. These coordinated actions indicate that counterfeit cosmetics have become a systemic issue rather than isolated incidents.

The consequences extend beyond economic losses. Many counterfeit products contain corticosteroids, heavy metals, or toxic impurities that can cause skin burns, allergies, and long-term health damage. Legitimate businesses suffer reputational harm, consumer trust declines, and regulatory agencies face increasing supervisory pressure.

At the core of the problem lies fragmented data. Each participant in the supply chain holds only partial information, lacking a shared verification system that enables cross-checking, validation, and full lifecycle traceability of products.

Why traditional control models are no longer sufficient

For years, cosmetic brands have fought counterfeits using holographic labels, scratch-off authentication codes, or static QR codes printed on packaging. This model has three critical weaknesses.

First, static labels and printed codes can be copied. An industrial printer costing only tens of millions of VND is sufficient to replicate holographic stickers or barcodes. When fake labels resemble genuine ones by 90%, consumers have virtually no tools to distinguish them.

Second, supply chain data is fragmented. Manufacturers use their own ERP systems, distributors store Excel files, agents keep handwritten records, and e-commerce platforms operate internal systems. When complaints arise, no party can accurately determine where a batch has traveled, how many times it has changed hands, or whether it has been substituted.

Third, there is no shared layer of trust. Each enterprise builds its own traceability platform, but buyers have no way to verify whether the data has been altered. When trust depends solely on the seller’s statements, traditional traceability systems become nothing more than a digitized version of “just trust me.” This is precisely the gap blockchain was designed to fill.

Blockchain – A “Digital Passport” for authentic cosmetics

Blockchain is a distributed ledger technology in which transactions are recorded in cryptographically linked blocks. Once data is written to the chain, no party can modify or delete it without detection. This immutability and transparency make blockchain an ideal infrastructure for cosmetic traceability.

Traceability from factory to consumer

Each cosmetic product leaving the factory is assigned a unique digital identifier (UID), functioning as a “digital identity card” for that product. As the product moves through distribution stages, each event (warehouse release, transportation, distributor receipt, retail sale, and consumption) is digitally signed by the relevant party and recorded on the ledger.

Consumers scan a dynamic QR code on the packaging to access the complete journey: production batch, manufacturing date, expiry date, declared ingredients, distribution history, first activation time and location. If the same code is scanned again in an unusual location, the system immediately flags a potential counterfeit duplication.

Immutable digital identity

Unlike static QR codes, blockchain-based identifiers cannot be duplicated with the same transaction history. Counterfeiters may replicate the appearance of a code, but they cannot reproduce the digital signatures of legitimate manufacturers, distributors, and agents. Each verification involves cryptographic validation rather than visual comparison.

Core differences from traditional traceability

In traditional systems, product data exists in isolated “data silos” owned by individual enterprises. In blockchain systems, data is written once and stored in a shared ledger accessible to authorized participants. Trust shifts from “trusting the enterprise’s claim” to “trusting independently verifiable cryptographic proof.” This distinction is technical, not merely a marketing slogan.

Lessons from international models

Blockchain-based traceability is not new. Many global corporations have implemented it for over a decade.

LVMH, together with Prada and Cartier, launched the Aura Blockchain Consortium in 2021 for luxury goods, including high-end perfumes and cosmetics. Each product receives a digital birth certificate verifying authenticity and ownership history. Similarly, Arianee developed an open protocol for digital product identity used by multiple European cosmetic brands to issue digital passports.

At the policy level, the European Union is moving toward mandatory Digital Product Passports (DPP) across industries, with cosmetics expected to follow batteries and textiles. Additionally, compliance with the Cosmetic Products Notification Portal (CPNP), ingredient documentation, and traceability requirements will become mandatory for Vietnamese cosmetics entering the EU market. The lesson is clear: blockchain-based traceability is no longer a competitive option but a prerequisite for global market access.

NDAChain and the roadmap for cosmetic traceability in Vietnam

With a vision to become national digital trust infrastructure, NDAChain is developed to address large-scale traceability challenges. Unlike public blockchains focused on crypto assets, NDAChain is a permissioned blockchain operating under the PoA-qBFT consensus mechanism, supported by a network of 49 public-private validator nodes including organizations such as SunGroup, Zalo, MISA, Sovico, and VNVC.

The platform achieves approximately 1,200 transactions per second, with an average confirmation latency of 2.5 seconds, and complies with international standards such as W3C, GDPR, and ISO/IEC 27001, meeting large-scale authentication and traceability demands in the cosmetics industry.

National infrastructure for the beauty industry

On NDAChain, NDATrace is developed as a shared identity, authentication, and traceability platform for the entire ecosystem. Cosmetic enterprises do not need to build their own blockchain but can integrate directly via NDATrace’s standardized APIs and SDKs.

Each enterprise is allocated a dedicated data space to manage product information, while critical verification events are recorded on NDAChain’s shared ledger. This model ensures commercial data privacy while enabling cross-supply-chain validation.

Benefits for three stakeholder groups

For businesses, traceability on a national blockchain protects brand integrity and supports compliance with Vietnam’s cosmetics declaration regulations (Decree 93/2016/ND-CP) as well as export requirements to the EU and ASEAN markets.
For consumers, a single scan reveals transparent product records independent of marketing claims.
For regulators, on-chain data allows violations to be traced back within seconds instead of weeks, reducing investigative costs and enhancing enforcement efficiency.

National vision: Digital trust in the consumer economy

Cosmetic traceability is also an important component of Vietnam’s data economy.

At the macro level, cosmetic traceability is part of Vietnam’s broader data economy strategy. As the digital economy aims to contribute 20% of GDP by 2025 and reach USD 90–200 billion by 2030, digital trust becomes a prerequisite. Consumers cannot increase online spending if they doubt product authenticity. Vietnamese enterprises cannot expand globally without internationally recognized data infrastructure.

NDAChain is positioned as a national trusted data infrastructure. Bringing cosmetic traceability onto a national blockchain embodies the philosophy of “Government leads, enterprises participate, citizens benefit.” The government ensures legal frameworks and standards. Enterprises integrate production and distribution data. Citizens gain independent verification rights before purchasing.

With the amended Law on Product and Goods Quality (2025) and the Law on Digital Technology Industry (effective January 1, 2026) introducing new traceability and data transparency requirements, early adopters will gain compliance and branding advantages in both domestic and export markets.

From fighting counterfeits to building digital trust

Counterfeit cosmetics are not merely a consumer or individual business issue. They test the data infrastructure capacity of the entire consumer economy. When each product has a digital passport and every supply chain event is recorded on a trusted ledger, anti-counterfeiting no longer depends on inspection team volume but on a new data architecture.

NDAChain is emerging as a key infrastructure platform for blockchain-based anti-counterfeit and traceability applications in the cosmetics industry. From this model, data authentication ecosystems can expand into other sectors such as functional foods, pharmaceuticals, fashion, luxury goods, and export agriculture.

Developing a “Make in Vietnam” national blockchain infrastructure also creates opportunities for Vietnam to proactively establish its own traceability standards while ensuring interoperability with international systems and standards.

Cosmetic enterprises wishing to integrate blockchain-based traceability on the national platform can register for a free NDAChain demo and trial the NDATrace module today. The technical team supports the entire process from DID issuance and API integration to QR code deployment on packaging. Learn more and register for a demo at: https://ndachain.vn/en