Prada Group, the parent company of Miu Miu, has utilized blockchain technology to combat the issue of counterfeit products. In collaboration with the Aura Blockchain Consortium, the company has launched blockchain services that enable customers to verify the authenticity of their purchases, as reported by Bloomberg.
A small card inserted in Prada’s high-end products states, “This authentic Prada product’s certificate has been uploaded on Aura Blockchain Consortium’s platform to record and guarantee its integrity.”
According to the Organization for Economic Cooperation and Development (OECD), counterfeit and fake products make up approximately 2.5% of global trade, amounting to an estimated worth of $464 billion annually.
To address this growing problem, Prada Group, along with industry leaders like LVMH and Richemont, established the Aura Blockchain Consortium in 2021. The consortium aims to develop blockchain solutions that can track their coveted and expensive goods, providing customers with a reliable way to authenticate their purchases and increasing the value of genuine items.
Furthermore, blockchain technology allows customers to easily resell or pass on their products, further enhancing the investment value of luxury goods.
“A digital certificate of authenticity is a huge, huge problem solver. In parallel, it helps us market the product and track its origins,” explained Stefano Rosso, chairman of Maison Margiela and CEO of BVX.
The Aura Consortium’s blockchain technology enables customers to verify products by accessing a digital certificate of authenticity. For example, customers can tap their smartphones on items like Maison Margiela Tabi shoes, which have embedded NFC chips. The chip then directs the phone to a website where the company provides an authenticity certificate and information about the product’s origin.
Similarly, Loro Piana, under LVMH, introduced a service that allows customers to scan QR codes on labels to verify the authenticity of high-end garments.
Prada Group Incorporates Blockchain into Fine Jewelry Eternal Gold Line
Prada Group has integrated blockchain tracking into its Fine Jewelry Eternal Gold line, which features certified recycled gold and ethically sourced precious stones. Customers can tap their phones on the jewelry’s card to access the certificate of authenticity, information about the materials used, and the item’s carbon footprint. This not only verifies the product’s sustainability claims but also provides customers with a digital record of ownership.
The implementation of blockchain technology in the luxury goods sector goes beyond authenticity verification. It allows brands to track the sale and repair history of products, giving customers comprehensive information about their valuable possessions. Pierre-Nicolas Hurstel, CEO of Arianee, a startup that works with consumer brands to build blockchain applications, even suggested that consumers may soon have a digital wallet on their phones containing certificates for all their luxury items.
However, the rise of a stronger secondhand market facilitated by blockchain technology could pose challenges for luxury brands that rely on exclusivity and scarcity to maintain their appeal. “This is not good for brands trying to avoid ubiquity and selling the promise of exclusivity,” said Luca Solca, a senior research analyst at Alliance Bernstein specializing in global luxury goods.