Farfetch is one of nearly 100 companies partnering with Facebook on an independent blockchain-based platform called the Libra Association and its own soon-to-launch cryptocurrency called Libra. Beginning in the first half of 2020, the Libra Association will offer consumers the ability to deal in “secure, scalable, and reliable” cross-border payments, Facebook announced by way of a whitepaper on Tuesday. The Switzerland-based non-profit is, per CNBC, expected to “leverage Facebook’s more than 2.7 billion monthly users to bring cryptocurrencies into the mainstream.”
Aside from Libra’s “mission to enable a simple global currency and financial infrastructure that empowers billions of people,” which CNBC’s Salvador Rodriguez says could “be beneficial to users in third-world and developing countries as well as loved ones who currently rely on services like Western Union to send remittances,” the platform could have some interesting implications for the fashion industry, particularly when it comes to the burgeoning resale market.
Farfetch CEO José Neves said in a statement on Wednesday that such blockchain endeavors “will benefit the luxury industry by improving [intellectual property] protection, and transparency in the product lifecycle,” particularly in terms of luxury resale, a market that is currently valued at more than $25 billion but also plagued with concerns – and litigations – centering on the infiltration of counterfeit goods.
As Vogue Business’s Maghan McDowell noted, Neves “anticipates that consumers’ expectations for visibility on a product’s origins and authenticity will only increase as the market for pre-owned luxury grows,” and that such a blockchain-based platform can help
“Blockchain is still in its relative infancy, but we think it holds a lot of promise with regards to how it could assist the luxury fashion industry scale solutions to these consumer expectations,” he said. And the Farfetch chief states that brands are eager for innovation in this realm: “Every time we speak to the brands, there’s this desire to really make progress on how to trace the life cycle of a product, and even fight counterfeits — not just the luxury companies, but brands like Nike and Adidas.”
The Farfetch, Facebook tie-up comes just a month after LVMH Moët Hennessy Louis Vuitton announced that it is launching AURA, a platform that it says “aims to serve the entire luxury industry with powerful product tracking and tracing services, based on Ethereum blockchain technology and utilizing Microsoft’s [cloud computing service] Azure.” In short: the blockchain-based service will make it possible for consumers to access the product history and proof of authenticity of luxury goods — from raw materials to the point of sale, all the way to second-hand markets.
The luxury goods giant – which owns brands like Louis Vuitton, Dior, Celine, Loewe, and Givenchy, among others – said it will not keep the technology all to itself. In a statement last month, a rep for LVMH said that “several brands from the Group, such as Louis Vuitton and Christian Dior, are currently involved, and advanced discussions are underway to onboard additional brands from the LVMH Group, and other luxury groups globally,” without naming names.
Early this month, Gregory Boutte, the digital officer for Gucci’s parent company, revealed that “Kering might be open to joining a blockchain technology platform that LVMH is developing to help track supplies chains and authenticate products in an industry that often has to grapple with counterfeit goods.”
As for whether a Facebook-centric blockchain is the answer, at least some experts are skeptical, given what Rodriguez calls “Facebook’s checkered past with privacy and trust, which will inherently be an obstacle for the company to overcome.”
“Facebook has already garnered a reputation for questionable privacy practices,” said Jake Yocom-Piatt, co-founder and project lead of Decred, a digital currency, told CNBC. “A trackable cryptocurrency from a ‘free’ network with a history of selling consumer data could just as easily track financial decision-making and sell it to third parties.”
Facebook has, of course, said it will use data about payments made with Libra for targeted advertising purposes.
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