Asia Blockchain Review recently spoke to Sami Abuzarifa, Head of Marketing of Luxtag, a blockchain-powered application that caters to the market with a solution to tackle counterfeits by promoting ownership tagging and track & trace. Abuzarifa talked about leveraging blockchain technology to fight against counterfeiting, applying the solutions to industries other than luxury products, and the potential for blockchain in Malaysia.

Asia Blockchain Review: How is Luxtag leveraging blockchain solutions to fight against counterfeiting?

Sami Abuzarifa: LuxTag creates digital twins of physical products & assets using blockchain technology to allow for the “right stories” to be told to manufacturers and consumers in a more trusted manner. The first layer of security provided by every LuxTag solution is composed of hardware. The physical tagging solution can be realized thanks to different technologies such as QR codes, NFC, RFID, and Holograms. LuxTag — always looking to broaden its range of hardware technologies depending on the type of items to be tagged and on the needs of the single customers — designs various solutions that aim to guarantee the best match. 

The data structure made possible through blockchain technology is the second layer of security provided by LuxTag. Scanning the hardware displays data on the software, the blockchain, on which information about the item can be stored immutably in time. Blockchain is essentially a ledger programmed to record and track anything of value, while possessing a distributed infrastructure without a central point of authority.

ABR: Why did you choose to enter the luxury segment? How much do counterfeit products affect the market in Malaysia?

SA: Luxury items are incredibly valuable and are, therefore, more likely to be counterfeited, stolen, and illegally sold. LuxTag created a solution that records the provenance of luxury items, as well as allows customers to claim their ownership and verify their authenticity. This product-tagging solution will help customers to verify and claim the ownership of their items using LuxTag’s application. 

Every luxury item, in fact, has a story that defines its essence and enhances its value. The LuxTag Solution enables customers to write an important part in the unique story of the item they own, creating a personal attachment to it. Any fake items, not only from the luxury segment, are extremely dangerous, not only for manufacturers (in terms of revenue loss), but also for consumers due to potentially high levels of toxic ingredients. For buyers, it’s essential to raise the awareness of such risks and understand how even a small purchase can harm you and the people around you. 

ABR: How does NEM blockchain play a part in Luxtag’s solution?

SA: LuxTag chose to use the new and revolutionary NEM Blockchain technology in order to give our customers an unmatched level of versatility and quality not found in any other service, ensuring our customer satisfaction. NEM Blockchain technology provides LuxTag with the security, speed, and scalability needed to fulfill the needs and wants of our clients. 

ABR: How can Luxtag replicate this system across other industries and sectors?

SA: LuxTag is already working in many industries such as documents (educational certificates), fashion (high-quality sports socks), and art. 

• FASHION AND JEWELRY: Everyday the industries of Fashion and Jewelry are threatened by counterfeits, making it difficult for brands to assure product authenticity to their customers. Footwear and handbags were the most counterfeited goods in the world in 2017. Due to counterfeits, brands are facing growing consequences such as lost revenue and damage to brand image and reputation. 
• DOCUMENTS: The increasing availability of fake transcripts and documents in circulation brings substantial risk to the credibility of local institutions. Fake institutions and certificate issuers operate with different levels of subtlety and sophistication, exploiting flaws in the current manual, labor-intensive, and inefficient verification process. LuxTag prevents this from happening by certifying without any doubt the authenticity and ownership of documents. 
• ART: Every artist understands that what cannot be seen is exactly what makes the artwork special and that the real challenge is showing what is behind the art. What constitutes the value of the art pieces can be anything from a particular technique to the materials used: all of this is lost without proper provenance. Not to mention the perks of keeping records of the movements of the pieces. The LuxTag Solution displays artworks’ fascinating past, prevents counterfeits, and enables Proof of Ownership. 
• FMCG (Fast-Moving Consumer Goods): Counterfeits have been a growing concern in the Fast Moving Consumer Goods market. Fruit, coffee, meat, olive oil, cheese, wine; all of them are being counterfeited at an alarming rate. Faked food supplies represented over US$12 billion in global seizures in 2013. The LuxTag’s product tagging solution puts the manufacturing process under scrutiny, registering each step and sealing the data in the blockchain.

Our solutions are easily adaptable for all kinds of products. 

ABR: What are some of the challenges that you have encountered in the fight against counterfeit products?

• New technologies i.e. 3D printing make counterfeiting accessible and cheap 
• E-commerce platforms enable distributors to undercut retailers for higher margins, harming brands and retailers
• Globalized sales lead to global supply chain complexity

ABR: Can you tell us about developing a DIY tag & trace platform for small businesses to set up on their own using Luxtag’s tools? What are your next steps for this project?

SA: We are currently in the midst of launching of a new DIY, self-onboarding platform that will enable users to sign up and create digital certificates for their items and tag it with a QR code or NFC sticker. This major step is very important because users will be able to authenticate and protect their items by using the LuxTag DIY tool. The product will be launched in August for free, and there will be another tier for enterprises (brands, etc.).

ABR: What are your thoughts on the blockchain landscape in Malaysia? What about other Southeast Asian countries?

SA: Malaysia can be seen as a global hub for blockchain-based projects. Blockchain technology systems here are well developed and easily accessible. Among Southeast Asian countries, Malaysia is considered to be the second-most technologically developed country after Singapore.

ABR: How is Luxtag transforming the luxury products sector in Malaysia?

SA: Every product has a story, but only truthful ones have meaning. LuxTag creates digital “twins” of physical products & assets using blockchain technology to allow for the “right stories” to be told to manufacturers and consumers in a more trusted manner.

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