LuxTag is targeting 500 high-end brands to register on their platform by 2020
Earlier in September this year, Malaysia has been rattled by the news of busted syndicate of fake MyKad and birth certificates given to foreign nationals, mainly those coming from China. The syndicate is deemed “the great betrayal of the nation,” a seriously treacherous crime. Documents, certificates and identity cards counterfeit could threaten the security of the country, cause political instability and job losses.
The public is well aware of fashion and luxury goods being vulnerable to imitation, however, items used daily such as electrical products, cosmetics, pharmaceuticals, household goods, cigarettes, and food and beverages are now actively copied and gradually entering the market.
Counterfeit food and beverages trading is a subcategory of food fraud and the Food and Drug Administration (USFDA) coined the term as economically motivated adulteration (EMA). EMA is defined as any substance that is added or replaced to a product to enhance the value and lower the cost of production for economic gains.
In 2017, Malaysian authorities reported that 80% of honey sold in the market are fake. Leading food brands like Nestle and Mead Johnson were also tainted as their most popular chocolate malt drink Milo and milk powder Enfalac A+ were illegally copied back in 2015 and 2017.
In 2018, an unknown brand of premix durian coffee which authorities believed to have been tampered with, sent numbers of people to the hospital for health complications after consumption.
A survey in 2013 as reported by the Monthly Index of Medical Specialties (MIMS) says that one in twenty drugs sold in Malaysia is fake. The most commonly used pharmaceutical product by Malaysian namely Panadol had fallen victim to fraudulence in August this year. GlaxoSmithKline, the manufacturer of Panadol stated that the fake tablets were a unique case as it was only known to be found in Malaysia.
British American Tobacco commissioned report by Oxford Economics reported that the illicit trade of tobacco yields the highest shares in South East Asia with a whopping 59% and 1000 fake cigarettes bought each minute. The Malaysian government has an approximate revenue loss of MYR 13.5 billion in unpaid taxes given that excise duties on cigarettes were increased in 2015.
Annually, the Malaysian government loses MYR 8 billion in tax revenue due to illicit trade since counterfeit items imply no tax on goods. Due to this activity, Malaysia was once on the watch list of Office of the US Trade Representative’s (USTR) list of counterfeiting and intellectual property rights (IPR) violations.
Rigorous counterfeit combatting activities have paid off as Malaysia is now off the watch list. However, counterfeit cases are still piling up and it needs more solutions to curb such activities.
To date, the solution to fake goods has been legal action and paper certificates and stickers of product originality which are easily faked or lost. Moreover, the rise of e-commerce, the advent of 3D printing and ever-increasing global trade complexity have certainly proven a challenge to restrain it. It is time for new technologies to disrupt the market.
LuxTag, is an anti-counterfeit tech company with a vision to restore trust and honesty in high-value assets trading. LuxTag is offering digitized certificates of authenticity registered in the distributed ledger technology, NEM blockchain- cryptocurrency and blockchain platform launched on March 31, 2015.
Through their application, customers can access the origin and provenance of products from the supplier, manufacturer, distributor, and retailer and product ownership record (as to verify new or pre-owned product). Customers can also enrol ownership and thus activate extended warranties.
As of today, assets which have been successfully protected by LuxTag’s include artworks, luxury timepieces, and educational certificates. Many national and international noteworthy organizations have also put their trust in LuxTag solutions.
Amongst them is Swiss watch manufacturer Chronoswiss for whom LuxTag has secured on its blockchain 500 pieces of watches with total worth MYR 14.7 million and the 25-year-old sports socks and accessories apparel manufacturer DeFeet where LuxTag’s system allows DeFeet socks for authentication, warranty, repair and loyalty reward in just one scan.
International Islamic University Malaysia also utilizes LuxTag platform to secure the issuance of a university degree that will put a stop to fake degrees and ensure the authenticity of the certificates and last but not least, the Malaysian e-services IT company DagangNet employs LuxTag blockchain technology for various authenticity verification systems.
In addition to patented digitized certificates of authenticity, LuxTag’s offering also includes a platform to secure documents, educational credentials or professional accreditations, plug and play assets tagging application programmable interfaces (API) subscription service, all using a secure blockchain platform.
Although just getting started, LuxTag has been carefully selected as one of the top 7 business to business (B2B) intelligent startups to enter the coveted SAP.iO Foundry (SAP’s strategic business unit) Singapore 3 months accelerator program where chosen companies have access to curated mentorship, exposure to SAP technology and API, as well as opportunities, to collaborate with SAP customers.
SAP is famous for its Enterprise Resource Planning (ERP) and data management programs. Upon the program’s conclusion in November 2019, LuxTag aims to integrate its service of digitized certificates of authenticity, ownership, and warranty to enterprises worldwide with SAP.
LuxTag is now raising a pre-series A funding through pitchIN, the leading Malaysian equity crowdfunding platform that is fully licensed by the Securities Commission of Malaysia. The funding round with a minimum target amount of MYR 1.2 million to a maximum of MYR 2.4 million is now pre-live to investors since early September. Within weeks, LuxTag has already secured one-third of the minimum target raise amount.
“First and foremost, Bitcoin is a prominent project using blockchain tech, however blockchain is more than Bitcoin,” says Rene Bernard (CEO of LuxTag). “We are delighted that LuxTag provides real added value and practical solutions to businesses. LuxTag’s blockchain-enhanced technology powers an effective anti-counterfeit measure and gives brand owners a competitive advantage. Our technology allows consumers to trace the origins of the products and engage with the products & manufacturers swiftly through apps. We are looking to secure more than MYR 4 million of business by 2020, as manufacturers, brand owners, and industries are subscribing with us.”
LuxTag expects to reach its target amount within the 30-day campaign when it goes fully live with its fundraising campaign. Interested local and international investors are cordially invited to participate in investing.
With the 2019 funding, LuxTag is looking to enhance and expand their product lines, hire more developers to accelerate tech development and expand their presence in Europe and North America. Envisioning an IPO in 2023-2025, LuxTag has set its eye on associating its name with trust.