23rd October 2019, Cyberjaya, Malaysia — 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.
The future is looking bright for LuxTag. With the 2019 funding, LuxTag is looking to
enhance and expand their product lines, hire more developers to accelerate tech
development and expand its presence in Europe and North America. Envisioning an
IPO in 2023-2025, LuxTag has set its eye on associating its name with trust and
honesty when it comes to valuable products and assets.
