One question Rene Bernard—the president of the Access Blockchain Association in Malaysia—and his future co-founders Faeez Noor and Jeff McDonald often posed to each other was: what problem could blockchain solve next?
2018 had seen a huge interest spike in the DLT (distributed ledger technology) thanks to the soaring value of Bitcoin and its ilk. People everywhere were discovering new uses for blockchain at a speedy rate; from gaming to real estate and green energy, it seemed as if the potential uses for the technology were boundless.
“We, being the typical tech enthusiasts, would have long discussions and brainstorming sessions on how blockchain could solve the world’s problems,” Rene said.
“One weekend, after one such brainstorming session, we came together with a plan on how we could solve the problem of counterfeiting in the luxury goods sector—hence the name LuxTag.”
Countering Counterfeits With Blockchain
Leveraging upon the decentralised and transparent nature of blockchain technology, LuxTag works to tackle the problem of widespread counterfeiting and stolen goods.
Manufacturers suffer when consumers settle for fake goods, and consumers are outright cheated when they buy fake products that convincingly pass off as luxury items.
“This is the reality of today’s situation—current anti-counterfeit solutions like cards or stickers can easily be replicated or forged,” Rene said. “This erodes the trust in consumers and causes tension between them and the brands they love and trust.”
It’s at this pain point that LuxTag has the solution. By getting manufacturers of luxury goods to link every product to the LuxTag platform, consumers will be able to immediately verify the authenticity of a product via a certificate on the blockchain that holds information about the product’s original manufacturing process.
Additionally, LuxTag also allows product manufacturers to retrieve insights into the end-stage of their products’ life cycles, giving them valuable analytics via an easy-to-use dashboard coupled with geographic heatmaps of user distribution.
All this is monetised via two models: the first via implementation and customisation fees, and the other by charging for each certificate produced.
“Blockchain uses highly secure cryptography to guarantee that no one else can pass off unauthorised goods as genuine products,” Rene explained. “Using the same methods, consumers will also be able to independently verify that the source of their product is genuine.”
Referencing Bitcoin and its anti-counterfeit measures, Rene said the exact same principle applies to the way LuxTag works, where they use the NEM blockchain to ensure that no certificate can be duplicated.
“The NEM blockchain is a business-ready platform that has been proven reliable whereby other blockchain platforms are on a more experimental stage,” he elaborated.
“Furthermore, the NEM blockchain provides a very intuitive set of APIs (application programming interfaces) that we can quickly build a solid and reliable product on.”
Anti-Fake Safeguards For Everything
From initially only focusing on luxury brands and manufacturers, LuxTag now also have other real-world use cases for their product.
“We discovered that the same model can be replicated across various industries and sectors, and currently, we are servicing four to five different industry sectors, including securing university diplomas and fashion products.”
Already, LuxTag’s list of clientele include DeFeet, a US-based apparel company, Poesy Liang, a Malaysian artist, a certain Swiss luxury watchmaker, and a Malaysian licensed pharmaceutical company.
Speaking on growing their reach and awareness about their service, Rene admitted that they faced an uphill task to gain traction due to their position as a first-mover.
“It’s not easy to gain a foothold in this segment as the industry is very conservative and we don’t have credibility in the market,” he said. “Hence, we had to move to other industries that are more adventurous and open to new ideas as our first subscribers.”
He also then admitted that there was work to be done in regards to educating the marketing about the need for such a service as theirs, especially with the foundation of their service (blockchain technology) still being in a relatively nascent stage.
“Blockchain optimises and improves these anti-counterfeit measures, as well as enables certain new features,” he continued. “But yes, we need to educate and spark interest in these additional features.
No False Dawn
But still, Rene is confident about LuxTag’s future prospects, and feels that LuxTag has enough of a unique proposition to stand out among other competitors should they show up.
“There’s room for more players, and the fact that we see the digital end-to-end supply chain solutions sector receiving bigger players validates that we are on the forefront of this very promising industry,” he said.
“For us, we position ourselves as experts in bridging the disconnect between the physical and digital world—not imposing our technology on the customers, but understanding their needs and providing a solution that adds value to the customer,” he added.
“If what we do doesn’t align with their needs, we’ll then assist them to find a proper partner that can fulfil their needs.”
As for what lies in store next, Rene shared a few details regarding what his company plans to do in order to scale and expand their reach, including plans to create a system that actively works to prevent fraud and counterfeiting through radio technology.
“So far, we’ve been relying on passive copy deterrents whereby a copy would be flagged only if someone reuses a tag that’s been used by someone else,” Rene said.
Adding on to that, Rene also announced other plans, including one to make their technology more accessible for smaller businesses.
“Our initial plan is to look at highly customisable solutions for key customers,” he said. “Proceeding from there, we envision making available a DIY tag and trace platform that small businesses or budding entrepreneurs can set up on their own using our tools.”
“We’re also looking into providing customisable physical QR or NFC tags for our customers to build their own tag and trace solutions.”
Feature Image Credit: LuxTag