Luxury brands team up on blockchain platform

Richemont's Cartier unit, LVMH and Prada Group have created a consortium to support a blockchain authentication platform of the luxury goods sector.

The overarching objective is to promote "a single global blockchain solution open to all luxury brands worldwide to provide consumers with additional transparency and traceability," said the partners in a joint statement.

The non-profit #AuraBlockchain consortium's platform will allow consumers to access a product's history and obtain proof of authenticity, they added.

Blockchain is the technology that underpins the digital currency bitcoin and is essentially a digital database of time-stamped records or transactions, which are unchangeable and decentralized, and is becoming increasingly popular as a track and trace tool for physical supply chains and to guard against counterfeit goods.

The #AuraBlockchain takes the form of a multi-nodal private blockchain, secured by ConsenSys technology and Microsoft, and can be accessed by brands for an annual licensing fee and volume-based payments, which will be reinvested into the platform.

Each product will be given a unique ID after manufacturing that will be recorded on the blockchain. When customers purchases a product, they will get a login to the platform that will provide a unique certificate of ownership and provenance, product history, a warranty and care instructions.

Brands such as Bulgari, Cartier, Hublot, Louis Vuitton and Prada are already making use of the system which can be customised to the brand owner's requirements. For example, it could also provide additional information such the craftsman behind an item, or environmental and ethical information.

Negotiations are also underway with other luxury brands, as the partners try to position the platform as an industry standard. They stress that the system is secure, preventing the exchange of competitively sensitive information, and any participating brand will continue to fully own and be responsible for its data.

"The Aura Consortium represents an unprecedented cooperation in the luxury industry," said Cyrille Vigneron, president and CEO of Cartier.

"The luxury industry creates timeless pieces, and must ensure that these rigorous standards will endure and remain in trustworthy hands," he added.

The system gives the luxury goods sector a tool to fight back against counterfeiting. According to the Global Brand Counterfeiting Report 2018 online sales of fake goods accounted for almost a third of total counterfeiting-related losses in the sector in 2017.

Just this month, Customs and Border Protection (CBP) officers in Cincinnati inspected a large shipment from China and found what appeared to be 242 fake Cartier Love bracelets, which if genuine would be worth almost $3.6m.

The items were subsequently found to be in violation of trademark and copyright codes and were seized. The shipment had been destined for an address in Greenfield, Indiana.

"Purchasing counterfeit goods not only damages our small businesses and enterprises, but also supports criminal institutions that often engage in human rights violations such as child labour and forced labour," said Cincinnati Port Director Richard Gillespie.

"Intellectual property is a critical component of a stable economy, and our officers work hard to protect our country and its citizens' financial wellbeing," he added.