Gem-erative AI: HALA and Digital Product Passports in Luxury

1. The luxury slowdown: A market in transition

The luxury industry is undergoing a structural correction. Leading holdings have reported sharp revenue contractions in 2022–2025, with a demand softness of roughly 20% across key markets like Europe, the U.S. and Asia. Recent stock market disclosures highlight such impact, with important brands having surrendered about 50% of their market capitalization in the past twelve months. Despite mounting scrutiny over sustainability, pricing practices, and supply‑chain disputes, many brands have seemingly continued to raise prices aggressively and systematically, without a commensurate improvement in product quality or innovation. Reputational concerns have reached even prestigious maisons, signaling a broader erosion of consumer confidence and trust across the luxury ecosystem.

This model has reached an inflection point: consumers are more conscious and price-sensitive, prioritizing value-for-money and verifiable transparency over brand heritage alone. They expect not only high-quality craftsmanship but also proof of ethical, traceable sourcing and compliance with fair and sustainable labor conditions.

At the regulatory level, the EU’s Ecodesign for Sustainable Products Regulation (ESPR) is accelerating this transition. By 2027, any physical good sold in the EU will require a Digital Product Passport (DPP) containing verifiable data about materials, origin, and environmental footprint. This goes far beyond the compliance requirement; it’s a fundamental restructuring of the retail business model, forcing brands to rethink how to communicate product value throughout the entire lifecycle.

It is within this stressed and evolving landscape that HALA emerges. I co-founded HALA as a B2B SaaS deep-tech platform offering an all-in-one solution for luxury brands, enabling them to create digital twins of their products for the sake of traceability, transparency and authenticity from supply chain to resale.

2. HALA business model

HALA’s mission is straightforward: to provide every product with a unique digital identity that evolves and updates over time. This identity is built around Digital Product Passports (DPP), which record every piece of information about the items, including:

• Raw material sourcing and ethical certifications;

• Craftsmanship and production information;

• Ownership transfers, exchange records, and repairs;

• Sustainability data (carbon footprint, recycling potential, etc.).

A handbag or a watch sold in Paris can later be resold in Tokyo, with its entire history securely stored and verifiable on HALA’s wallet, accessible both to the brand and to the collector who owns that good. HALA’s solution is to link the retail supply chain with second-hand resale, allowing brands to remain connected to their products long after the point of sale, capturing data and information previously invisible.

HALA tackles two interconnected but distinct plagues within the luxury market: counterfeiting and black market distribution. HALA creates verification pathways that address both threats simultaneously, linking each collectible goods to its digital DPP. Each product authenticated through HALA’s distributed-ledger infrastructure receives an immutable certificate secured by cryptographic protocols, rendering any subsequent forgery or alteration infeasible. Consequently, collectors obtain a high degree of confidence in provenance and authenticity, eliminating reliance on costly and often inconsistent third-party appraisal services.

3. DARQ Tech as HALA’s core driver

HALA focuses on the two DARQ components that are the most relevant for the luxury industry: Distributed Ledgers (DLTs) and Artificial Intelligence (AI). But what are these emerging technologies, and why are they disruptive?

DARQ stands for Distributed Ledger, Artificial Intelligence, Extended Reality, and Quantum Computing, and is redefining competitiveness inside many industries. Within the field of fashion and luxury retail, structurally mature and traditionally conservative, DARQ technologies are drivers of radical innovation, allowing new ventures to challenge and reshape the oligopolistic business model of key players of the segment.

Distributed Ledgers (DLTs), commonly referred to as blockchain, provide immutable, tamper-proof records of materials, production steps, and transfers of ownership, ensuring end-to-end supply chain transparency and reducing the risk of counterfeits.

Artificial Intelligence has an exponential pool of applications within the retail segment, from forecasting and predictive analytics to inventory management and fraud detection. Within this context, drawing on materials developed in my thesis, this article introduces the concept of Gem-erative AI, which refers to the use of generative artificial intelligence within the luxury sector, with particular reference to gemstones, diamonds, and high-end watches. Through computer vision and machine learning, AI enables:

• Standardized, automated smart grading systems of gems (as the four Cs of diamonds: color, cut, clarity, carat);

• Accurate tracking of raw material provenance, ensuring sustainable and ethical sourcing;

• Real-time quality verification along the supply chain.

Gem-erative AI, as synthetized in figure 1, also creates dynamic digital twins enriched with immersive storytelling: from 3D renderings to personalized narratives of heritage, it transforms every product into a living asset.

Figure 1: Gem-erative AI.

Source: Author's elaboration.

For what concerns the other two technologies, Extended Reality (XR) opens the door to virtual product experiences and interactive showrooms, while Quantum Computing (QC) promises next-generation cryptographic security and optimization across global supply networks.

4. The HALA Paradox: Resale eclipsing retail

One of the most visible phenomena in luxury today is what we call the HALA Paradox:

• The second-hand market, now valued at over $50 billion globally, is growing faster than primary retail;

• Many products, from limited-edition haute joaillerie pieces to rare bags and watches, resell for more than their original retail price, driven by collectability, scarcity and brand prestige;

• Luxury houses capture none of this added value, as they have no structured way to participate in resale transactions.

HALA bridges this gap by enabling brands to benefit from exchanges within our platform, where ownership transfers are recorded and royalties (transaction fees) are applied and shared with the original brand. This approach not only fights counterfeits but also turns resale into a source of recurring revenue.

5. Regulation as an opportunity

Instead of seeing the ESPR compliance as a cost, HALA enables brands to transform regulation into a competitive advantage. Digitizing the entire lifecycle of products permits to:

• Showcase sustainability metrics in a verifiable way;

• Build consumer loyalty and trust through transparency;

• Use DPPs as engagement and monetization tools.

HALA’s third revenue stream is built on data tracking and collection, providing a full set of information currently unaccessible for luxury brands. Every interaction, whether an initial sale, a resale, or a repair, is recorded on HALA’s ledger and enriches a real-time dataset. Through our vertical AI engine, this dataset is transformed into actionable insights that luxury brands can purchase as analytics services to:

• Identify which products retain or increase their value in the secondary market;

• Anticipate consumer trends and geographic hotspots for resale demand;

• Optimize production and inventory planning based on real-world usage patterns.

6. HALA’s journey and vision

As a young startup, HALA has already been validated by mutiple ecosystem players: we were selected for the leading startup accelerator in Europe, StartupBootCamp (SBC), inside their AI&Web3 cohort in the Amsterdam headquarters. Beside becoming our first external investor, the international experience maturated inside SBC gave us access to invaluable mentorship as well as both tangible and intangible resources that have prepared us for our first foundraising. The capital round we are collecting from a batch of Venture Capital (VC) and angel investors will move HALA from pre-seed to seed stage, signing the end of the early bootstrapping phase and potentially opening the door for a gradual, scalable growth.

Furthermore, HALA is partnering with the ‘Google for Startups’ Program and belongs to top networks and associations within the Italian startup ecosystem as InnovUp, SmartCityLab, RomaStartup and Ecodigital.  

Everything began in late 2024, when HALA, only a few days old, won both StartCupLazio and BlockchainBeach competitions. These early victories endorsed our vision and propelled us into a broader national startup scene.

Looking ahead, we believe the concept of ownership is about to change. In five years, we will not just have wallets on our phones for money: we will have wallets for everything we own.

This blog post draws from my graduate thesis entitled "From the Liability of Newness to Gem-erative Innovation: DARQ Tech Startups in Luxury Retail”. In July 2025, I discussed this thesis as the concluding step of my Master of Science in Business Administration at the University of Rome Tor Vergata, School of Economics.

Thank you!

Lorenzo