Evaluating the luxury goods market with Blockchain technology

While many of the stock exchanges sold on NYC's Canal Street are legal, there is a thriving market in counterfeiting handbags with luxury brands like Prada and Louis Vuitton. (Photo by Spencer Platt / Getty Images)

Photo by Roberto Machado Noa / LightRocket via Getty Images) [19659002] Whether you've traveled there or heard about it from friends, you're probably familiar with some of these markets. For example, Canal Street in New York City which runs through the Chinatown district, or the Vietnam market by Ben Thanh . These markets are widely known by locals and tourists as the "knock-off" or "bootleg" spots in the area.

After earning my degree at the Hofstra University in New York, I was only on a train away from New York City and the charm of Canal Street. The excitement of being able to pick up the latest male cologne, the Oakley sunglasses, or even the Hollywood movies still in the cinemas, was the dream of every college student to feel empowered (or maybe just mine).

But, it was not until I traveled to Vietnam Ben Thanh Market, that I found myself really bewildered by these international markets. I found everything and more, from branded men's suits, tailor-made suits and sportswear, to watches and new electronics. I remember taking a pair of Burberry collar shirts, all under $ 100 USD. Still, my most valuable acquisition was a basketball jersey from the University of North Carolina with a name sewn on the back, Jordan. That's right, I found a Michael Jordan UNC jersey … for $ 50 USD.

But what did all these goods have in common? They were not authentic. How can you be sure? You can look at the material, the points, the coloring or even just the grammatical spelling of some words & nbsp; on the "official" tag. The more you travel, the more you are able to distinguish the authentic from a knockoff.

Online & nbsp; Third-party vendors

Over the years, we have even witnessed online online markets such as third-party sites where you can purchase any sports shirt or clothing you want for over 50 % discount, or markets similar to those of the original Silk Road .

But, often, these counterfeit markets exist in simple markets that we use on a daily basis. For example, consider sites such as eBay Amazon or other third-party vendor sites. For those consumers who like to buy technology or electronics, eBay and Amazon are good places to address those buyers who do not know what they are looking for. A word of caution, because invariably, these products are not legitimate. I can not tell you how many times I went on a site like eBay, Amazon or other consumer-based online markets, looking for electronics like a Mophie battery case or a robotic vacuum cleaner similar to iRobot's Roomba, finding out they were eventually stolen or they were really a good knock-off. Not surprisingly, all these products stopped working days later.

Blood Diamonds

Another popular example is the diamond market. With today's technology, bold and unscrupulous sellers take advantage of social media platforms & nbsp; how & nbsp; Facebook and WhatsApp to sell "blood diamonds", often using false documents from countries like Cameroon and the Central African Republic. The 2006 film, Blood Diamond is still a perfect example of the current diamond market crisis.

For the average consumer, it becomes very difficult to deduce the authenticity of an object. Because? Loyalty. We want to trust the merchants we buy our products from. Prospective buyers must rely on sometimes dubious credibility traders to determine the authenticity of the assets they wish to purchase.

Evaluation of luxury

Despite the two problems I have identified above, how can we turn these problems into sustainable solutions? Application of blockchain technology to evaluate luxury. New or old, luxury brands must recognize the importance of adopting new technologies to help ensure sustainable business practices.

Blockchain technology can act as a key element to ensure sustainability due to consumer demand. But why?

No. 1 – Consumers welcome transparency

Consumers are becoming increasingly aware of where their luxury goods come from. More importantly, they are willing to pay extra for one thing in particular: sustainability . According to Nielsen Global Business Sustainability Report 2015 about 66% of respondents said they were willing to pay more for sustainable goods. Specifically, millennials .

As part of this demographic, they agree that we are entering one of the most difficult economic climates in over 100 years. But still, we are still willing to pay more for our goods. Because? Personally, I think you pay more for a given item because of one of the main factors: brand loyalty. At the end of the day, I know that my products work and do what they are designed for. Nothing hurts me more than when something for which I pay the money well, does not do what it was intended to do.

A luxury item that makes the portfolios of open people are luxury handbags. They have shown to outperform both the stock market and the gold index in terms of long-term investment .

Thus, that handbag was placed in a closet in a closet or vintage wine in the cellar, probably will continue to increase in value while the demand tends to rise. Think of the billions of dollars of luxury goods hidden in "safe places" that could be exchanged every year around the world, if we only knew more about their hidden character traits.

By implementing blockchain technology, merchants and consumers can trace the entire life cycle of an asset, which is available on a digital ledger, provides all the necessary information related to sourcing up to final production.

# 2 -Providing Clear Provenance and Value [19659003] The development and use of authentication systems as Blockchain, helps to ensure a clear provenance and evaluation, minimizing the risk of fraud and counterfeiting.

The Diamond Market

Expanding more the & nbsp; My example of diamond above, the diamond market is valued worth more than $ 72 billion every year. But the global diamond jewelry industry is invaded by diamonds produced in an unethical manner, more commonly referred to as "blood diamonds".

Although not blind to this practice, the diamond industry was one of the first industries to embrace the 21st century of technology age. This is the best time to start exploring the endless possibilities that could eventually and inevitably make giant strides.

Millennials Are The Key

Our generation can witness the unveiling of another new phenomenon, similar to the birth of the Internet and the "dot-com". I believe that once an ecosystem has been established, it should be widely adopted throughout the industry, as organizations, institutions and individuals will come out of expectation, trying to solve the puzzle.

With the emergence of blockchain technology, companies have already started to implement their ecosystems with the hope that it can take off and take control of a standard technology

Everledger for example , recently launched the Rare Carat Report exploits blockchain technology in combination with artificial intelligence (AI) to enable consumers to evaluate and evaluate their diamonds for sale anywhere in the world. Operating as one of the first companies to embrace this technology, it has already placed over 1.6 million diamonds on the Blockchain. The entries on digital recording include dozens of attributes for each diamond, such as its color, carats, certification number and other information.

Digital Assets and Collectibles

Another example is Arianee . The blockchain startup continues to target counterfeit items by tracking any luxury item with a serial number. Regardless of where it is located in the supply chain, manufacturers, wholesalers, retailers and consumers will have the opportunity to take advantage of the Blockchain to validate the authenticity of these items. Trademarks are able to purchase tokens to generate certificates of authenticity.

Luxchain another start-up company, believes that the conversion of luxury items into a digital asset, or even a collector's item, can allow the user to trace his or her origins through the supply chain. Alex Hung, the company's Chief Technology Officer, is a business developer and analyst for HSBC Asset Management and Hong Kong Police Force, which provides an interesting strategy to implement asset management technology. The company provides a blockchain-led book that allows users and owners of articles to create such a resource that contains information about the chronology, origin, property, and other characteristic traits of the object. As a frequent traveler, I was obviously interested in this company, especially because it is outside of Asia, which I have traveled before.

I contacted Kenny Au CEO of Luxsens, a company that uses AI technology, helps connect luxury sellers to their consumers, on why, even internationally, the Blockchain is needed in the goods market luxury.

Au told me that from his point of view, having a window on the life cycle of an article, allows its users and owners to see all the cases in which it was managed, including the purchase history.

"Having a real and traceable digital identity can provide the means for which scammers can be easily recognized and held accountable for unlawful behavior"

According to Luxchain co-founder Aidaa Wong, who uses a decentralized blockchain network helps to enforce data encryption because people are concerned with getting the promised value.

At the end of the day, we as consumers need to monitor how this technology continues to grow, providing a mechanism where traders and consumers are able to access the many features of these luxury items while creating a more sustainable system in which the goods are authenticated and above all trustworthy.

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If you were to enter your closet, 39. Attic or in the basement, what objects would you find? Whether it's a Louis Vuitton bag, a Coach wallet, a Rolex watch or another long-forgotten luxury item, there's no doubt that these items have kept a certain value.But how do you know that the object you have is actually the amount you think it is?

Absent to pay a visit to an expert or use an authentication system of sorts, there is no way to ex be completely sure in the evaluation. This is where the implementation of blockchain technology comes into force, which can make tremendous progress in this area.

Traveling Through Time

Over the last twenty years, the luxury goods market has been valued at around $ 3 trillion and can be found in various forms around the world. Imagine the types of art works, jewelry, old school electronics, clothing and even alcohol that could date back to years or even centuries.

Even in today's market, these products need a reliable and verifiable system that works to better monitor a particular item or the life cycle of the brand, refining potential counterfeiting problems. Furthermore, this provides more transparent transactions and relationships between buyers and sellers.

As a young lawyer and millennium, I have seen the effects of this market on my travels abroad. My thesis? I believe that blockchain technology is the most appropriate mechanism to apply in this market because it has the ability to tackle many of the disadvantages that the luxury goods market is currently facing.

In my travels abroad, I studied how technology and luxury goods industries compared to the United States. Specifically, I focused on Brazil, Ghana, South Africa, China, Vietnam and Taiwan, as there is a variation in the economic structure of these nations.

In this article, I identified two examples where blockchain technology could apply to the luxury goods market.

No. 1 – Implementing a fair pricing mechanism

The trash of every man (or woman) is another treasure. The first major challenge that I believe should address the luxury goods market is the lack of a fair and transparent and standardized price index. Currently, two different evaluation systems are used at the same time: the value that a trader assigns to an article and the value that a consumer assigns to an article. Unfortunately, these systems provide a subjective measure of value, in the absence of another mechanism to confirm their price

Evaluation of the merchant

In this system, consumers have no guarantee on the price that they are paying is "fair" or "standard" throughout the industry. The strong likelihood of being cheated by an honest agreement, discourages many consumers from buying and even from subjecting themselves to potentially valuable assets. Without the knowledge and experience of an expert, there is no way to be sure of it.

Consumer Evaluation

Consumers often assign their measure of value to what they believe an article is worth. But which index or factors are going? I remember that during my travels in Brazil and Ghana, "barter" was a commonly known practice when it came to shopping. Many times it took minutes, hours and even days to reach an agreement with a seller on an object. Because? Rating.

It all comes down to how a consumer (and a seller) measures the value of an object that is interested in buying (or selling). Many times in these markets, the seller is often the artist or the creator behind the work.

Regardless of the country in which you travel, from the economy in which you are making the transaction and from the asset you are interested in buying, the lack of price transparency acts as a deterrent to potential participants on both sides of the trade.

The Blockchain can provide such a system that can be used by traders and consumers to help validate and authenticate these luxury goods [19659003] # 2 -Receipt of counterfeit products

Another problem I encountered during my travels abroad it was to know if I was buying a good or an authentic object or not. The counterfeit goods market is one of the main sources of destabilization when it comes to the luxury goods market as a whole. According to some reports, the counterfeit fashion market can cost consumers up to 450 billion dollars annually

Tourist Markets

you have traveled there or heard from friends, you are probably familiar with some of these markets. For example, New York City's Canal Street, which runs through the Chinatown neighborhood, or the Vietnamese Ben Thanh market. These markets are widely known by locals and tourists as the "knock-off" or "bootleg" area of ​​the area

After earning my degree at the Hofstra University in New York, I was only on a train from New York City and the charm of Canal Street. The excitement of being able to pick up the latest male cologne, the Oakley sunglasses, or even the Hollywood movies still in the cinemas, was the dream of every college student to feel empowered (or maybe just mine).

But, it was not until I traveled to Vietnam Ben Thanh Market, that I found myself really bewildered by these international markets. I found everything and more, from branded men's suits, tailor-made suits and sportswear, to watches and new electronics. I remember taking a pair of Burberry collar shirts, all under $ 100 USD. Still, my most valuable acquisition was a basketball jersey from the University of North Carolina with a name sewn on the back, Jordan. That's right, I found a Michael Jordan UNC jersey … for $ 50 USD.

But what did all these goods have in common? They were not authentic. How can you be sure? You can look at the material, the points, the coloring or even just the grammatical spelling of some words on the "official" tag. The more you travel, the better you become to distinguish the authentic from a knockoff.

Online and third-party suppliers

Over the years we have even witnessed online online markets, such as the third -party sites where you can buy any sports shirt or clothing you want to over 50% discount, or markets similar to those of the original Silk Road.

But often, these counterfeit markets exist in sight markets we use on a daily basis. For example, consider sites like eBay, Amazon, or other third-party vendor sites. For those consumers who like to buy technology or electronics, eBay and Amazon are good places to address those buyers who do not know what they are looking for. A word of caution, because invariably, these products are not legitimate. I can not tell you how many times I went to a site like eBay, Amazon or other online markets looking for electronic devices like a Mophie battery case or a robotic vacuum cleaner similar to iRobot's Roomba, eventually finding out that they were either stolen or a good knock -off. Not surprisingly, all these products stopped working days later.

Blood Diamonds

Another popular example is the diamond market. With today's technology, bold and unscrupulous vendors are taking advantage of social media platforms like Facebook and WhatsApp to sell "blood diamonds", often using fake documents from countries like Cameroon and the Central African Republic. The 2006 film, Blood Diamond, is still a perfect example of the current diamond market crisis.

For the average consumer, it becomes very difficult to deduce the authenticity of an object. Because? Loyalty. We want to trust the merchants we buy our products from. Prospective buyers must rely on sometimes dubious credibility traders to determine the authenticity of the assets they wish to purchase.

Evaluation of luxury

Despite the two problems I have identified above, how can we turn these problems into sustainable solutions? Application of blockchain technology to evaluate luxury. New or old, luxury brands must recognize the importance of adopting new technologies to help ensure sustainable business practices.

Blockchain technology can act as a key element to ensure sustainability due to consumer demand. But why?

No. 1 – Consumers welcome transparency

Consumers are becoming increasingly aware of where their luxury goods come from. More importantly, they are willing to pay more for one thing in particular: sustainability. According to the Nielsen Global Corporate Sustainability Report 2015, around 66% of respondents said they were willing to pay more for sustainable goods. In particular, millennials.

As part of that demographic, I agree that we are entering one of the most difficult economic climates in over 100 years. But still, we are still willing to pay more for our goods. Because? Personally, I think you pay more for a given item because of one of the main factors: brand loyalty. At the end of the day, I know that my products work and do what they are designed for. Nothing hurts me more than when something for which I pay the money well, does not do what it was intended to do.

A luxury item that makes the portfolios of open people are luxury handbags. They have shown to outperform both the stock market and the gold index in terms of long-term investment.

So, that bag kept in a basket in a closet, or vintage wine in the cellar, would probably continue to increase in value while demand tends towards the top. Think of the billions of dollars of luxury goods hidden in "safe places" that could be exchanged every year around the world, if we only knew more about their hidden character traits.

By implementing blockchain technology, merchants and consumers can trace the entire life cycle of an asset, which is available on a digital ledger, provides all the necessary information related to sourcing up to final production.

# 2 -Providing Clear Provenance and Value [19659003] The development and use of authentication systems, such as Blockchain, helps to ensure a clear provenance and evaluation, minimizing the risk of fraud and counterfeiting.

The Diamond Market

Expanding more my example of diamonds above, the diamond market is estimated worth more than $ 72 billion each year . But the global diamond jewelry industry is invaded by diamonds produced in an unethical manner, more commonly referred to as "blood diamonds".

Although not blind to this practice, the diamond industry was one of the first industries to embrace the 21st century of technology age. This is the best time to start exploring the endless possibilities that could eventually and inevitably make giant strides.

Millennials Are The Key

Our generation can witness the unveiling of another new phenomenon, similar to the birth of the Internet and the "dot-com". Credo che una volta stabilito un ecosistema, esso dovrebbe essere ampiamente adottato in tutto il settore, dal momento che organizzazioni, istituzioni e individui verranno fuori dall'attesa, cercando di risolvere il puzzle.

Con l'emergere della tecnologia blockchain, le aziende hanno già ha iniziato a implementare i propri ecosistemi con la speranza che decollasse e prendesse il sopravvento come tecnologia standard.

Everledger, ad esempio, ha recentemente lanciato il suo Rare Carat Report, che sfrutta la tecnologia blockchain insieme all'intelligenza artificiale (AI) per consentire ai consumatori di valutare e valutare i loro diamanti in vendita in qualsiasi parte del mondo. Operando come una delle prime aziende ad abbracciare questa tecnologia, ha già collocato oltre 1,6 milioni di diamanti sulla Blockchain. Le voci sul record digitale includono dozzine di attributi per ogni diamante, come il suo colore, carati, numero di certificazione e altre informazioni.

Risorse digitali e oggetti da collezione

Un altro esempio è Arianee. L'avvio blockchain continua a indirizzare gli articoli contraffatti rintracciando qualsiasi articolo di lusso con un numero di serie. Indipendentemente da dove si trova nella catena di fornitura, produttori, grossisti, dettaglianti e consumatori avranno la possibilità di sfruttare la Blockchain per convalidare l'autenticità di questi articoli. I marchi sono in grado di acquistare gettoni per generare certificati di autenticità.

Luxchain, un'altra start-up, ritiene che la conversione di oggetti di lusso in un bene digitale, o persino un oggetto da collezione, possa consentire al suo utente di tracciare le sue origini attraverso catena di fornitura. Alex Hung, Chief Technology Officer della compagnia, è uno sviluppatore e analista di business per HSBC Asset Management e Hong Kong Police Force, che prevede una strategia interessante per implementare la tecnologia di gestione degli asset. La società fornisce un libro mastro basato su blockchain che consente agli utenti e ai proprietari di articoli di creare tale risorsa che contiene informazioni sulla cronologia, l'origine, la proprietà e altri tratti caratteristici dell'oggetto. Come viaggiatore frequente, ovviamente ero interessato a questa società, soprattutto perché si trova fuori dall'Asia, che ho viaggiato in precedenza.

Ho contattato Kenny Au, l'amministratore delegato di Luxsens, un'azienda che utilizza A.I. tecnologia, aiuta a collegare venditori di lusso ai loro consumatori, sul perché, anche a livello internazionale, la Blockchain è necessaria nel mercato dei beni di lusso.

Au mi ha detto che dal suo punto di vista, avere una finestra sul ciclo di vita di un articolo, consente ai suoi utenti and holders to see any and all instances in which it was handled, including the purchase history.

“Having a real, traceable, digital identity can provide the means for which fraudsters can be easily recognized and held accountable for illicit behaviors,” said Au.

According to Luxchain's co-founder, Aidaa Wong, utilizing a decentralized blockchain network, helps strengthen data encryption because people care about getting the value they were promised.

At the end of the day, we as consumers need to monitor how this technology continues to grow, providing a mechanism in which merchants and consumers are able to access the many characteristics of these luxury items, while creating a more sustainable system where goods are authenticated and most of all, trusted.