Is blockchain a panacea for luxury goods counterfeiting?

What is so unique about the much-vaunted blockchain?

A recent piece of news caught the attention of the crowd, as French boutique group LVMH, Cartier, a subsidiary of Switzerland’s Richemont Group, and Italian fashion giant Prada issued a joint statement announcing a partnership with ConsenSys to set up the blockchain alliance Aura, hoping to combat the counterfeit market and preserve brand values with the help of blockchain technology.

It is speculated that in 2021, the global luxury industry is expected to be valued at about $107.9 billion. And the Harvard Business Review reports that the global counterfeiting trade totals $4.5 trillion, of which 60 to 70 percent is targeted at the luxury market.

The rampant counterfeiting has caused a considerable impact on the luxury industry, and the luxury giants have then turned their attention to blockchain, hoping to fight counterfeiting with the help of blockchain technology. So, what is the unique feature of the blockchain which is highly expected?

As we know, blockchain is essentially a public ledger that is now being used to record all kinds of publicly shared information. Some experts point out that “blockchain technology provides full transparency of a product from the beginning to the end use. This technology allows users to track and trace the legitimacy of any product from luxury fashion to basic necessities. In this way, blockchain can encompass a variety of companies, consumers and social groups, including sustainable sourcing, determining the origin of all goods in the supply chain, and further improving trust between brands and their many stakeholders.” In short, blockchain can track not only the production sourcing process, but also the supply chain of fashion brands.

Is blockchain a panacea for luxury goods counterfeiting?

Toni Belloni, managing director of LVMH, called blockchain “a great opportunity for our industry to strengthen the connection with our customers by providing them with a simple solution to better understand our products.” He hopes other luxury manufacturers will join in, “By working hand-in-hand with other luxury brands, we are leading the way in terms of transparency and traceability.”

In fact, Aura is not the first program to use blockchain for anti-counterfeit authentication. In January of this year, PuffBar, a well-known U.S. e-cigarette brand, announced a partnership with VeChain to combat the large number of counterfeit e-cigarettes on the market. In addition, the more famous one is blockchain Arianee.

Arianee was co-founded by Pierre Nicolas Hurstel, Frederic Montagnon and two founders of Vestiaire Collective, Alexandre Cognard and Christian Jorge. To date, the protocol has been adopted by Cartier, Piaget and Vacheron Constantin, among others.

As an example, Vacheron Constantin has partnered with Arianee in 2019 to propose a certification solution for its watches via blockchain. The operation is simple. The first buyer of the watch receives it, scans the QR code with the Vacheron Constantin app, and then creates a blockchain-based certificate. In this way, the link between the watch and its owner becomes unforgeable. If the watch changes hands, the next owner will scan the QR code again to register the change.

Is blockchain a panacea for luxury goods counterfeiting?

With the growing maturity of blockchain technology, it is a general trend for all industries to use blockchain technology to improve quality and efficiency, and the luxury industry is no exception. It is conceivable that the biggest benefit of applying blockchain technology is that it can trace the whole life cycle of the product itself and realize the transparency of the luxury goods supply chain, so that consumers can be protected. The resale of luxury goods on the secondary market will also become easy and secure.

Of course, blockchain technology is not a panacea for luxury goods counterfeiting, and it is necessary for market regulators to strengthen management by improving relevant industry standards and strengthening market supervision. Only with the cooperation of enterprises, government and users can the problem of luxury goods counterfeiting be truly solved.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/is-blockchain-a-panacea-for-luxury-goods-counterfeiting/
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