How Blockchain is entering the luxury industry

The luxury industry has been plagued for years by counterfeits and copies and recently has been brought to task about cleaning up its supply-chains. Can Blockchain technology help solving these issues?

Luxury brands have always been vulnerable to cheap counterfeits, damaging both brand identity and corporate coffers. The OECD estimated that the trade in fake goods accounts for about 3.3% of total world trade and a substantial part of this is in luxury goods. The luxury industry has tried a myriad of things over the years, but the fight against counterfeits is mostly left to law enforcement and customs officials. A clear track and trace technology to identify and authenticate products has so far been lacking (and not only in luxury…).

Another, more recent but equally pressing, issue for the luxury industry is how to establish and demonstrate - in the face of demands for increased efforts around sustainability, that their supply chains are ‘clean’ or, at least, transparent. How can businesses make sure that a leather supplier, for example, sources the skins sustainably; that a leather tannery does not poison local waterways, or that suppliers are not under-paying employees, using child labour or engaging in animal cruelty? Customers today want to reassure themselves that what they buy is as clean as it can be and expect the luxury industry to vouch for their suppliers and manufacturers and to be ultimately responsible for them.

In comes Blockchain tech

These various woes may come to an end due to the vision of industry champion LMVH (Louis Vuitton Moet Hennessy. LMVH has been leading the fight against counterfeits for years and employs small armies of lawyers to pursue fakers in courts around the globe. LMVH recently founded a not-for-profit Blockchain, called the Aura Blockchain Consortium in collaboration with the Richemont Group and Prada. Aura is open to membership by any luxury brand prepared to adhere to the platform’s guidelines, i.e protecting the legacy and identity of luxury brands, and hopes as such to finally weed out fakers, wannabees and those cutting corners in the production process

Aura aims to authenticate the ownership of luxury items like watches, jewellery, handbags and couture and will document and register information about a product from its inception, like which raw materials are used and which factories were involved in the manufacturing process. Information can be added on, like product aftercare and resale. Blockchain technology gives each individual item on AURA its own unique digital identity based on an NFT (SEE OUR ARTICLE ON NFTs), carrying information about its provenance, after-care (repairs) and resale chain (previous ownership).


Blockchain technology has a big role to play in the resale – circular - market. Given that most luxury brands have recently started re-sell platforms for their own brands (much like StockX for sneakers), the authentication of each individual item is paramount in establishing trust in the resale market and to make it work seamlessly. In buying a valuable vintage Cartier watch, for example, one used to have to rely on how trustworthy the salesperson was or how much was truly known about the watch’s provenance, price and previous ownership, something that can be a real hit and miss for the non- connoisseur. With Blockchain, this authentication is so unambiguous that we do not have to rely on experts. And this is especially relevant for higher volume items, like the resale of handbags or clothing.

A last, long-awaited and highly anticipated, benefit of the Aura Blockchain Consortium is that its members can use the platform to launch digital collections as NFTs, as long as the brands do not do this for speculative reasons and keep luxury’s legacy and reputation for longevity in mind. The luxury NFTs and the new digital collections by luxury brands are already changing the face of the industry and the Aura Blockchain will be its ‘store’.

Blockchain technology seems to have killed two birds with one stone for the luxury brands. It gives buyers of luxury items the certification and the peace of mind that what they buy is both ‘real’ and ‘clean’. Blockchain tech may finally have given the luxury industry the ability and power to give the boot to fakers, opportunists and polluters and we are all a bit better for it.

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