Can the blockchain truly battle fake luxury fashion? LVMH, Mercedes-Benz, Prada Group, Richemont and OTB founded Aura Consortium to authenticate their goods – but not everyone buys it

Sep 15 , 2023

Luxury companies are using blockchain technology to authenticate their products. Photo: Christian Louboutin

Major luxury brands like Louis Vuitton, Loro Piana and Maison Margiela have launched services built on the Aura Consortium’s blockchain to allow customers to verify that their purchase isn’t a knock-off

Clients can scan QR codes or tap smartphones on products with embedded NFC chips, which will show their authenticity certificates and even origins – but many are still sceptical about the technology

For almost a decade, I’ve been listening to digital prophets predict a future where banks save billions of dollars, customers can trace their mangoes back to the organic farm where they were grown, and financial intermediaries are a thing of the past, all thanks to the blockchain. I’ve been waiting for that future to arrive, but I’ve never come across it in my daily life.

Miu Miu, owned by Prada SpA, is one luxury fashion brand that’s been making use of blockchain technology for authentication purposes. Photo: Bloomberg

Imagine my surprise, then, when I encountered the word “blockchain” inside a Miu Miu bag.

I’d recently bought the bag, and a little white card was tucked away in a pocket. On the piece of 100 per cent recycled fibre, it read: “This authentic Prada product’s certificate has been uploaded on Aura Blockchain Consortium’s platform to record and guarantee its integrity.”

Luxury brands are launching services to allow their customers to verify their products’ authenticity. Photo: Getty Images

Miu Miu’s parent company, Prada Group, is one of several major luxury houses investing in hi-tech ways to track their most coveted and most expensive products. Over the past year, brands including Loro Piana, Louis Vuitton and Maison Margiela have launched services built on the Aura Consortium’s blockchain that allow customers to verify that their item isn’t a knock-off.

The rise in counterfeit luxury bags

Trainees practising methods in verifying the authenticity of a handbag following a class at the Extraordinary Luxuries Business School in Beijing. Photo: AFP

The hope is that tracking handbags, coats and diamond rings this way could be a game changer in the industry’s fight against the ballooning counterfeits market. As much as US$464 billion worth of counterfeit and pirated products change hands each year, accounting for 2.5 per cent of world trade, according to a 2019 estimate by the Organisation for Economic Cooperation and Development.

A rare white Hermès Birkin Himalaya 35 handbag at an auction preview at Christie’s in Paris, France, in March 2016. Photo: Reuters

Blockchain technology is just one of the weapons deployed by the sector in a years-long battle against fakes. Recent efforts include Richemont’s new platform for sharing information about lost or stolen watches and jewellery, and LVMH-owned Patou launching an AI-based verification system called Authentique Verify.

Giving customers a more reliable way to prove their products are real could help raise the appeal of originals, while making it harder to sell fakes on the second-hand market. And by making it easier for customers to pass on or resell their products, the technology could help prove the case that many of these highly priced items have some investment value.