Owner of the iconic Louis Vuitton label, luxury brand conglomerate LVMH, plans to launch a blockchain to track the authenticity of high-priced goods. The platform is expected to launch in May or June and will include Louis Vuitton and Parfums Christian Dior. It will later expand to 60+ luxury brands of LVMH.
LVMH gathered a full-time blockchain team for AURA, who has been working closely with Ethereum design studio ConsenSys and Microsoft Azure, according to two people familiar with the project. Coindesk reports that AURA was built using a permissioned version of the ethereum blockchain called Quorum.
While LVMH nor its partners ConsenSys and Microsoft would comment before the project’s official launch, a source involved in the build spoke to CoinDesk. “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 source involved in the project reports that LVMH actually questioned why it would allow third parties to put themselves between its brands and their partners due to the fact that blockchain is supposed to eliminate intermediaries. “This should be done in the form of an industry consortium rather than a third party actor coming into the marketplace,” the source said.
LVMH plans to offer the service in a “white-label form” to other brands, which will include the group’s competitors. Instead of creating an app specifically for AURA, it will run behind the brands. “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.
While it seems like a great idea, LVMH may run into issues when trying to get its competitors onto a blockchain platform. To avoid such issues, LVMH will donate all intellectual property (IP) to a separate entity. That entity will then be owned by the participating brands, said the source.
“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 source added.