Powerhouse LVMH Working on Blockchain to Track Luxury Goods

By Warren Hayes | March 27, 2019
Powerhouse LVMH Working on Blockchain to Track Luxury Goods

Moët Hennessy Louis Vuitton SE, better known as LVMH, the French luxury conglomerate is currently working with ConsenSys and Microsoft Azure to create a blockchain platform for tracking its products and proving authenticity.

According to unnamed sources close to the matter, the collaboration has been kept well under wraps so far but is understood to have been at work for over a year already. Their platform, called AURA, is being built on JPMorgan’s Quorum blockchain platform running on the Ethereum blockchain.

AURA is scheduled to go ‘live’ in May or June, starting with Louis Vuitton and Parfums Christian Dior. Later on, AURA’s coverage is expected to encompass other LVMH brands, and eventually even its competitors.

LVMH boasts over 60 high-end and luxury brands in its stable, covering everything from clothes to cosmetics, and watches to wine. It owns many of the world’s most sought after brands, such as Italian jeweler Bulgari, fashion houses Celine, Fendi, and Marc Jacobs, bag maker Moynat, Swiss watchmaker TAG Heuer, and champagne label Veuve Clicquot.

LVMH, ConsenSys, and Microsoft have declined comment on the matter until the project is officially released. However, one anonymous source who claims to be involved in building the platform reportedly told CoinDesk:

“To begin with AURA will provide proof of the 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.”

This is not the first time that luxury players have shown interest in using blockchain to track or authenticate their expensive goods. Other platforms and mini consortia like Arianee or Vechain have already made an appearance. But, according to the same source, LVMH questions why it would want to risk any third parties wedging themselves between its brands and their partners, especially if a key concept behind blockchain is to do away with intermediaries.  

As a result, it is believed that AURA will be created as “an industry consortium” meaning in a white-label form to other 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 further explained.

On top of this, Quorum’s data privacy tool will ensure no leakage between different brands and customers.

But how does LVMH intend to attract even its competitors to use a platform that will be clearly marked as being an LVMH product?

Apparently, LVMH will donate all intellectual property (IP) to a separate entity, which in turn will be owned by participating brands. The source elaborated:

“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.”

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