Are you tech savvy? Are you a neophile? Perhaps you are, perhaps you are not. But if you are using internet or social media, you have most likely heard of ‘BitCoin’. And if you heard of BitCoin, you heard of ‘Blockchain’, the buzzword of the year 2017. The blockchain technology is believed by some to be capable of disrupting the global financial system. But did you know it is also capable of disrupting the supply chain system?
VeChain Foundation is a non-profit company based in Singapore that leverages the blockchain platform to offer enterprise-level digital solutions. The company has successfully implemented solutions across various industries such as agriculture, liquor, and luxury goods. Recent exciting collaborations, however, show VeChain’s penetration into other industries such as insurance, telecommunication or automotive. The focus of this post will be on the luxury goods industry.
The lucrativeness of the luxury goods industry is the biggest reason why high-end companies became the victims of counterfeiting. Online counterfeiting cost luxury brands more than 30 billion dollars in 2017. However, not only companies are the victims of counterfeiting, but also their customers. To tackle the issue and help both businesses and customers, VeChain establishes a personal connection between luxury brands and customers and enables the traceability and transparency of the supply chain. That is, VeChain enables a user to track a whole journey of a product in real-time. Furthermore, the immutability of blockchain ensures that once data are logged into the platform they become unchangeable and thus, ensures the authenticity of the product.
Luxury brands are one of many partners of VeChain. The company is gaining a support from the public as well as private sectors. For example, the Chinese government partnered up with VeChain to receive a drug and vaccine traceability solution after the vaccine scandal. Other partners include Renault, PwC, Givenchy, BMW, Unilever, Kuehne & Nagel, DB Schenker and many more.
VeChain appears as a promising platform but why is its price dropping? Is it just another hype or will blockchain eventually transform the way businesses operate?
Sources:
- https://www.vechain.com/
- https://www.tradevigil.com/negative-effects-counterfeiting-brands/
- http://us.fashionnetwork.com/news/Luxury-brands-lose-30-3-billion-due-to-online-counterfeiting-in-2017,977979.html
- https://www.straitstimes.com/asia/east-asia/in-china-vaccine-scandal-infuriates-parents-and-tests-government
- https://coinmarketcap.com/currencies/vechain/
- https://vechaininsider.com/partnerships/a-complete-list-of-vechain-partnerships/
Hi Trung, very interesting post. I do see the benefits luxury goods companies can get from block-chain. An interesting twist to this, is that second hand online (and offline) retailers or vintage stores can guarantee their credibility by showing that their products are indeed authentic. A website that I like to use myself to sell luxury goods is Vestiaire Collective. VC is an online buy/sell platform for luxury goods. People who would like to sell their luxury goods can log in and list their items for sale. VC guarantees authenticity by first going through all goods that are sold by sellers before it reaches the buyers. When an order is placed, the seller ships the item to VC in Paris for an authenticity check. If the authenticity is guaranteed, then the item is shipped to the buyer. Block-chain could eliminate this step by showing directly that the item is or is not counterfeited. VC would save a lot of money because they do not have to check every item and it would save them logistics cost, and less transportation is better for the environment as well.