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Luxury conglomerates LVMH, Richemont and Prada have announced an “unprecedented collaboration”, they are joining hands on a blockchain consortium which will enable consumers to trace and authenticate their goods.
The luxury sector is notoriously known to be plagued with the issue of counterfeits and knockoff products. According to research firm Frontier Economics, the global trade in counterfeits will balloon to US$991 billion by 2022. While this figure also comprises other consumer products in categories like pharmaceuticals, the emergence of resale and “re-commerce” sector through sites such as Vestiaire Collection and The RealReal also means greater susceptibility for online fraud and the sale of stolen luxury goods.
To mitigate the risks associated with the situations mentioned above, the luxury groups employed the use of blockchain technology to provide authentication. The unhackable nature of such technology makes it a prime choice for these companies to leverage and create a global, digital ledger that can store information such as the product’s history, proof of ownership, warranty and maintenance, all of which can be accessed by the consumers.
“Consumers can easily and transparently follow a product’s lifecycle, from conception through distribution, with trusted data throughout, and thus strengthen their relationship with their favourite luxury brands,” the companies said in a statement.
Called the Aura Blockchain Consortium, the initiative was first conceived by LVMH in 2019 and it has partnered with Microsoft and a software technology company ConsenSys to conceive this project. Currently, Bvlgari, Cartier, Hublot, Louis Vuitton and Prada brands are active on the platform.
The use of blockchain has recently gained popularity as seen in the recent surge in interest for cryptocurrencies such as Bitcoins and of cause, the proliferation of NFTs across the digital space. This move towards high-tech solutions is also in line with the current trend seen across the various industries, spurred by the coronavirus.
Ultimately, each luxury brand has their own unique heritage and they are definitely eager to share their story through their savoir faire but with so many other similar-looking products on the market, it will only dilute their rich history.
“The Aura Consortium represents an unprecedented cooperation in the luxury industry,” said Cartier CEO Cyrille Vigneron. “The luxury industry creates timeless pieces and must ensure that these rigorous standards will endure and remain in trustworthy hands.”