Luxury brand conglomerate LVMH which is also the owner of the iconic Louis Vuitton label is planning to launch a blockchain that will enable consumers to check out the authenticity of high-priced goods.
Dubbed as AURA, the cryptographic provenance platform will initially feature Louis Vuitton and another LVMH brand Parfums Christian Dior. Expected to go live in May or June, LVMH will be adding other 60-plus luxury brands and other products from its competitors eventually.
The conglomerate has had employed a full-time blockchain team in stealth mode for over a year. The said team have been working closely with ethereum design studio ConsenSys and Microsoft Azure, as stated by two people familiar with the project.
A permissioned version of the ethereum blockchain called Quorum was utilized to build up AURA. Quorum was developed by JPMorgan and focusses on data privacy. Neither LVMH nor its partners ConsenSys and Microsoft did not comment over the project, however, CoinDesk quotes a source involved in the build
“To begin with AURA will provide proof of authenticity of luxury items and trace their origins from raw materials to point of sale and beyond to used-goods markets. The next phase of the platform will explore protection of creative intellectual property, exclusive offers and events for each brands’ customers, as well as anti-ad fraud.”
LVMH controls over 60 luxury brands including some well-known names such as Dior, Dom Pérignon and Hublot, with reported revenues of $53 billion in 2018.
Other luxury provenance platforms and mini consortia have had ventured into the authenticity-tracking blockchain such as Arianee or Vechain, prior to LVMH. As per the source, LVMH questioned why it would allow third parties to position themselves between its brands and their partners, especially when blockchain is supposed to be a technology for eliminating intermediaries.
The source elaborated:
“This should be done in the form of an industry consortium rather than a third party actor coming into the marketplace.”
LVMH intend with AURA is to offer service in a white-label form to other brands including the group’s competitors. That is instead of some kind of an app, AURA will run behind the brands using it. The source stated:
“So if you are a customer of a luxury brand, you are not going to see AURA; you are going to see the Louis Vuitton app or the app of another luxury brand.”
Notably, LVMH took into account the problems that arise between IBM and Maersk by their blockchain venture. As a solution, the platform will donate intellectual property (IP) to a separate entity and that entity, in turn, will be owned by the participating brands. The source further added:
“So Gucci, for example, could decide to join the platform and be a shareholder – in which case their claim to the IP would be as great as Louis Vuitton’s claim to the IP. That is the main difference between this project and the IBM Maersk project. which hopefully makes it much more comparable to Komgo, the trade finance consortium.”
Moreover, Quorum’s data privacy tools should ensure that no information will be leaked between brands or their customers. Facilitating cooperation among firms, the project is very much in line with luxury-goods industry standards, per the source, particularly with the recent anti-counterfeiting efforts of the European Union Intellectual Property Office.
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