If any sector can stand to benefit from blockchain, it’s the luxury industry. The distributed digital ledger most famous for powering the Bitcoin cryptocurrency is useful for keeping records of an item’s journey through tangled supply chains, providing a strong sense of security that the item is, in fact, what it claims to be. It’s a major concern in a world where counterfeit goods steal profits from established brands and can tarnish a brand’s reputation in the consumer’s eyes. According to the Global Brand Counterfeiting Report 2018, worldwide counterfeits totaled $1.2 trillion last year, $98 billion of which account for apparel, shoes, textiles, handbags, watches and beauty products.
That’s why Secoo, among China’s largest luxury e-commerce platforms, is adopting blockchain. In the high-stakes luxury world, shoppers want to be sure they’re paying top dollar for the real thing—not a cheap knock-off that could be harmful.
Secoo claims it’s the first luxury company to launch a blockchain. While others like Debeers have put their products on existing blockchains, Secoo very well might be the first to build its own distributed database. The company said once a physical product has had its authenticity verified, anti-counterfeiting information is added and uploaded onto the blockchain.
“Relying on the blockchain technology, decentralization, non-modification and traceability, products will have a unique identification with multiple points of information for anti-counterfeiting,” Secoo said.
Consumers can confirm this information for themselves via the Secoo mobile app.
Secoo said it will leverage its physical locations, warehouses and brand partnership to encourage luxury labels to join its blockchain. With 10 years of experience in luxury goods authentication, Secoo owns Asia’s largest luxury authentication center in addition to 100 appraisers across the globe.
“The application of blockchain will increase consumer trust and establish a new standard for the complicated e-commerce industry,” Secoo said.
Blockchain remains an emerging technology still too immature for some applications and for widespread adoption. However, the Secoo deployment shows some companies are eager to achieve first-mover status and apply blockchain in ways that add value for both the enterprise and end users.