Shinsegae International to adopt Amazon blockchain-based e-warranty for luxury goods

Shinsegae International Inc. will join hands with Amazon Web Services (AWS) to adopt a blockchain-based e-warranty to ensure authentication of luxury goods purchased online amid the recent move of high fashion to online retailing.

The fashion arm of South Korea’s retail giant Shinsegae Group said it will introduce a digital warranty program using AWS’s blockchain service called Quantum Ledger Database (QLDB) by the end of this year.

The system will be first applied to high-end products sold at the company’s online shopping mall S.I. Village and later be expanded to cover all products sold at its online and offline stores.

With the digital warranty program, Shinsegae International aims to take the lead in fostering a reliable high-end e-commerce market where customers can rest assured shopping without fear of buying fake luxury goods.

The move comes after the country’s online upmarket product market has burgeoned recently.

As of last year, the domestic online luxury market value amounted to 1.59 trillion won ($1.35 billion), growing 10.9 percent from 1.43 trillion won a year ago, according to market researcher Euromonitor. Compared to 2015 when the market size was 1.04 trillion won, it expanded a whopping 52 percent. The country’s top luxury online platform S.I. Village saw its luxury brand sales jump 47.8 percent on year in 2020.

In tandem with the market growth, the number of counterfeit reports filed with the Korean Intellectual Property Office (KIPO) also more than doubled on year in 2020 to 16,693 cases from 6,661 cases a year prior.

The e-warranty to be issued by Shinsegae International will serve as a digital token that guarantees the authenticity of products and prevents counterfeiting and theft. The system powered by Amazon QLDB service manages and tracks data through cryptographic verification to prevent forgery or alteration.

The digital warranty will contain various product data such as order number, serial number, purchase history and ownership. The warranty will also certify the authenticity of pre-owned products by showing change in ownership history, thereby preventing stolen goods from being traded through second-hand markets, the company said.

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