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LVMH, Owner Of Louis Vuitton, Launches Blockchain Technology To Track Luxury Goods

02/04/2019

Blockchain is a technology originally created to optimize and secure the cryptocurrency Bitcoin.

But researchers see bigger potentials, as they started implementing technology to other industries other than the internet, to ensure that data cannot be tampered with, and transparent to all parties involved. From Fintech companies to big gaming brands, the world is betting big on blockchain technology.

This eventually made the term more popular than cryptocurrency itself.

This time, the France-based multinational luxury brand conglomerate LVMH, owner of the Louis Vuitton label, is all set to launch a blockchain designed to verify the authenticity of its high-priced goods along the supply chain.

Codenamed 'AURA', reports that the blockchain technology is meant to track goods by Louis Vuitton, as well as other LVMH brands, which include Parfums Christian Dior and others.

The company aims to later extend the technology to other LVMH ‘s 60-plus luxury brands.

A Louis Vuitton store in Nice, France
A Louis Vuitton store in Nice, France

A source involved with the development said that:

"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."

The technology works with ERC-721 non-fungible tokens (NFT). These tokens allow for digital representations that are not only immutable but they also represent only one unique item.

With this platform, the company can provide consumers the necessary data, including whether the goods transacted are authentic.

Moreover, the blockchain network would allow individuals to have information about the origins of the materials used.

LVMH also intends to offer this AURA service in a white-label form to other brands including competitors. So rather than creating an app of some kind, AURA can run behind the brands that want to use it.

“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,” the source explained.

To do this, LVMH will donate all intellectual property IP to a separate entity. That entity, in turn, will be owned by the participating brands.

"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."

The company has reportedly been working on the product with Ethereum development studio Consensys and Microsoft Azure for more than a year.

And AURA here, is built using a permissioned version of the Ethereum blockchain, called Quorum, which is focused on data privacy, developed by JPMorgan.

Quorum has data privacy tools to ensure that no information can leak between brands or their customers.