Louis Vuitton Moet Hennessey (LVMH), which had a turnover of $46.8 billion in 2018, is the owner of luxury brands including the wine producer Chateau d’Yquem (which has been a vintner since 1593) and has officially announced a Blockchain-powered platform called Aura. Aura is designed to enable luxury brands to be able to track materials that are used to manufacture items, through supply channels and production, to the shops where they are sold. It is also the intention to use Aura for some luxury brands for the trade of second-hand items such as handbags, dresses, watches, etc. The second-hand market is currently $360 billion p.a. and is predicted to grow to over $400 billion in 2020, making it actually larger than the market for new luxury brands, which is $302 billion, according to the fashion resale company Thredup.
The German Blockchain organisation IOTA, which has been working with a number of major cars manufactures, has also recently launched The Block to track and monitor the supply chains for luxury clothing brand ALYX.
While we reported LVMH plans a few weeks ago in Digital Bytes, what is really interesting about Aura (which is being built with ConsenSys and Microsoft) is that LVMH has said that, according to a press release, it is already in discussion with other leading luxury brand owners. It is not normal for competitors to pay and develop technology and then share this with their competitors, but LVMH has decided that fraud and counterfeiting are endemic in the luxury brands sector, and it is better if the industry uses one platform to help tackle this challenge.
Blockchain was originally conceived as being a consensual technology where no one entity had total control, as it operates in a very decentralised manner. Will we see other industries using Blockchain technology in such a collaborative manner like LVMH is offering to do and so solve common problems for its industry? Is this a sign of a more collaborative style of capitalism?
