Passports provide a licence to travel while also providing security – an established international recognition of proving identity and accompanying a ticket to ride.
Passports have also come back into conversations in the last few months through vaccine passports. Covid-19 has forced the imposition of restrictions on our ability to move from one country to another, even for one town to another at the height of the pandemic. Vaccine passports have provided the way out – the combination of the proof of identity and the proof of vaccination that provides more certainty and security.
But how does this apply when it comes to products rather than people? According to the
Global Brand Counterfeiting report, in 2017, the market for counterfeit products reached $1.2 trillion. More worrying, though, is that it was expected to reach $1.82 trillion in 2020. Fast forward to 2021, and the joint
EUIPO and the OECD study shows that counterfeit products represent 6.8% of all European imports, worth EUR 121 billion.
Considering the above, it’s easy to see why regulators, supply chain stakeholders, and consumers are pushing for the creation of digital product passports. With these product passports, consumers will not only know the products they buy are authentic, but also that their purchases adhere to high ethical standards, whether it’s luxury goods or consumer electronics.
So how can blockchain technology can aid the creation of secure digital product passports.
Why Digital Product Passports?
In recent years, the world has moved past using
paper-based documentation, and, nowadays, most documents and files used in a business setting have been digitised. So now is the right time for the creation of digital product passports.
These product passports can serve a dual purpose. For one, consumers are increasingly concerned about the origin of the products they buy and the ethics and sustainability practices of the companies that manufacture these products. Also, there are often
legal requirements relating to the conformity and safety of products.
From a business’s perspective, product passports can also help them certify, for example the origin of the product and its journey through the supply chain. It can also point to both a product’s sustainability and authenticity.
Therefore, a digital product passport can bring transparency into the sourcing, manufacturing, supply chain, and compliance processes. In turn, this gives consumers the ability to buy with confidence and regulators the ability to ensure compliance.
The problem is, however, that, like their paper counterparts, digital product passports can be counterfeited. And considering the extent of the sales of counterfeit products described above, it’s understandable that bad actors would have much to gain by fraudulently changing the contents of the passports.
Blockchain can hold the answer: data collected in the blockchain network is automatically stored in a database that is constantly updated, providing a reliable and immutable record of all stakeholders in the chain. This results in a visual and digital representation of the whole journey from mine to dealer to client which not only facilitates traceability and product assurance, but also helps accelerate digital transformation, realise greater value and build trust across the whole ecosystem.
As a result, product passports can sufficiently verify not only the origin and authenticity of products but also the sustainability, social responsibility, and legal compliance practices of the manufacturer or distributor. By implication, this verification also increases consumer confidence in a brand. Why would you risk buying without trust in the product roots?
A perfect example of the implementation of blockchain technology in product passports is watch manufacturer Breitling’s use of it in its new certificates of authenticity since October 2020. By using Blockchain, Breitling ensures that the certificates provide full transparency, are immutable, and remain future proof. As a result, every buyer is provided with a unique product passport that certifies the origin of the watch, and counterfeiting is eliminated.
The Gemstone’s Journey
Imagine being able to then personalise your products journey within your family, from the where, when and why you decided to buy the gemstone to special events and gifting the product. Transferring assets to the next generation are as much about commercial value as they are sentimental. These stories are personal and risk being lost in the passage of time. The products digital passport could capture these events in many ways including videos, making them available to those who have the right permissions to read beyond the product alone.
“There are many reasons why a client buys gemstones or art from an investment perspective to the fact that the simply find it attractive. Every client thinks about a valuable item’s inheritance as well as it’s possible sale and for this trustworthy certification is key. Blockchain brings trust to our world and will soon create two markets those who operate with transparency and integrity enabled by technology and those who choose not to. At Marquis we intend to be a leader in developing the trusted ecosystem.” Sophie Marquis, Founder of Marquis gemstone and fine art advisory.
The Bottom Line
Product passports are a straightforward way to verify the origin of a product and the sustainability, social responsibility, and legal compliance practices of the manufacturer. Not only does this allow consumers to verify where a product comes from and its sustainability but also allows regulators to confirm compliance with a raft of legal requirements relating to the product’s conformity and safety.
Through technology we can expand the concept of passports, from people to products to provide security, certainty and is also a means – in the context of gemstones – to both protect and enhance value both for now and for the future.