Louis Vuitton Launched a Blockchain for Luxury Goods in Ongoing Fight Against Counterfeits

Louis Vuitton Launched a Blockchain for Luxury Goods in Ongoing Fight Against Counterfeits

by May 20, 2019

ConsenSys and Microsoft just announced AURA, a blockchain platform that aims to offer the luxury industry with product tracking and tracing services. AURA is based on the Ethereum blockchain and Microsoft Azure, in partnership with the LVMH Group, which owns well-known luxury brands like Louis Vuitton and Parfums Christian Dior.

For Louis Vuitton, the development of the AURA project is the culmination of the traceability program (Track & Trace) launched over three years ago.

Apparently, advanced discussions are underway to onboard additional brands, both from LVMH and other luxury groups globally. On top of Louis Vuitton and Parfums Christian Dior, the group owns approximately 60 luxury brands, including Hublot, Dior, and Dom Pérignon among others.

ConsenSys, which builds applications, infrastructure, and solutions on the Ethereum blockchain network, contributed to the design and development of Traceability Smart Contracts, based on ERC 721 non-fungible token standards. They also helped create a brand API that would allow luxury brands to interface with AURA on a white label basis.

AURA Certification via App

The luxury goods industry involves many specialized actors—design, raw materials, manufacturing, and distribution. The various steps of luxury goods production will be recorded on the shared ledger so that during purchases, customers would be able to use the brand’s app to receive an AURA certificate with all the product information.

The goal is to provide transparency and a single source of truth for consumers who may want to ensure the authenticity of the products they are paying for—while also gaining more information regarding the product origin and components. Consumers would also be able to access information regarding an item’s ethical and environmental impact, along with instructions for product care, and after-sales warranty or other services.

We can see AURA helping to curb luxury product fraud, particularly with items bought online, but it will be interesting to see if the ledger would be able to help cater to the growing customer desire for more ethical fashion. The press release states that “brands have flexibility in designing the capabilities of AURA; some may choose to focus on the sourcing of raw materials, whereas others may focus on providing tailored services and strengthening consumer loyalty”.

The implication here is that brands seem to be the main source for production information, which may be a cause for concern. The ledger may be immutable, but the source of information and how it is documented may impact the blockchain’s efficacy on truly representing an item’s production life cycle. Therefore, implementation would be key here, along with some thoughtful checks and balances throughout the process.

AURA won’t be the first time that someone attempts to allow for luxury product verification via blockchain. The Malaysian-born Luxtag is parked on the NEM blockchain network, and was born out of a need to help verify genuine luxury products from convincing counterfeits—and thus positions anti-fraud at the front and center of its development.

Featured image via LVMH Group