Louis Vuitton with RFID (Radio Frequency Identification) chip on all products.
Protection of Luxury Brand Value with Activation Certificate through Blockchain.
Due to the prolonged coronavirus, demand for ‘pent-ups’ is leading to the luxury market.
- Pent-up effect is a phenomenon in which suppressed demand is rapidly revived.
The use of NFT and blockchain technologies in related industries is also increasing to prevent damage to the distribution of imitation products in the market due to the expansion of demand for luxury goods.
Frontier Economics, a London economic consulting firm, predicted that the global counterfeit market will grow to KRW 1,100 trillion by 2022.
As the counterfeit market grows, related companies have no choice but to risk their lives on the “genuine authentication system” for reasons that adversely affect the profits and reputation of luxury brands.
“Even Garment Card, which used to verify authenticity, has difficulty in distinguishing authenticity and falsification, as imitations on the market embody details like genuine products,” said an official from the luxury industry.
Luxury brands are showing interest in blockchain technologies such as NFT as sluggish fighting continues.
Blockchain is a technology that streamlines the process of recording transactions on each node’s network and tracking their records.
The chain connected to the blocks cannot be changed and remains a reliable record.
NFT is also unable to replicate the same to ownership and copyright because the unique identification values of each token are stored on the blockchain.
In April, Louis Vuitton, along with Prada and Cartier, launched a blockchain technology called “Aura Blockchain Consortium” to protect the scarcity value of luxury goods and solve authentication problems of luxury goods.
A Louis Vuitton official said, “We can build trust with customers who purchase products by knowing the entire production and distribution path of products through digital certificates in chips.” “For luxury brand customers who are concerned about authenticity, the industry needs to further enhance the ‘digital activation’ system.”
Chanel also introduced a system that inserts metal chips inside bags that will be released in South Korea starting this month and provides activation and guarantees through blockchain technology. It provides post-registration service for 8-digit serial numbers that combine English and numbers. It is expected to resolve inconvenience caused by loss of warranty card.
“Even if we change the imprint of the TC code that we used before and prevent forgery by adding holograms, it is hard to distinguish the artificial counterfeit products. If we register the product through blockchain technology, we can reduce the risk of losing the guarantee card or forgery.” said a Chanel official.
Industries emphasized that authentication and transparency are the key to protecting brand value. In particular, the value of the blockchain-based brand forgery prevention system is expected to become more important because counterfeit goods, which are difficult to distinguish for ordinary people, are poured into the market and used transactions are also made.
Meanwhile, according to a BTRIPS official, “After consultation with DeMer, a luxury shop in Cheongdam-dong, Korea, 1:1 exchange of luxury brand products with BTRIPS NFT and luxury brand products will be possible in the future,” he said.
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