This startup uses AI algorithms to crack down on fake products
The Times of India , Dec 9, 2018
Cheap substitutes and fake products are a real problem across sectors, and companies usually resort to raids to seize counterfeits. A team of techies based in Pune, Nitin Gupta, Yogesh Miharia and Abhishek Agarwal, have built an AI-based solution to find an affordable and efficient fix to this problem. The three, who have worked in the tech and startup sectors, founded NeuroTags in January 2017 with their saving of about $300,000. Gupta, NeuroTags’ CEO and CTO, tells TOI how his company’s technology tells the real from the fake. Edited excerpts from an interview:
How does the technology work?
NeuroTags provides algorithmically coupled tags, one is open and the other protected. The open tag is visible on the product and can be scanned by anyone with a smartphone to get the information about the product and its authenticity. Once a product is purchased, the buyer has access to the protected tag, which is kept inside the product seal. After scanning the protected tag, the user gets the authenticity information with certainty and the product is registered to the customer. The tags are connected, monitored and protected by algorithms and artificial intelligence on the cloud in such a way that if anyone tries to replicate the tags, it is recorded and the copied product gets invalidated.
How is this technology better than existing methods like RFID tags and holograms?
The problem is that existing technologies are ineffective in eliminating counterfeits and discouraging counterfeiters. RFIDs and holograms are used extensively but can be replicated easily. We have seen cases in the pharma industry where the packaging of fake medicines is as good as the real ones, including the holograms. RFID technology is expensive too. Ours is a digital solution that lets brands track their products as they travel through the supply chain and till they reach the consumer.
How does your technology help the consumer? Is it just for the back-end and the brand or can a buyer track a product and check its authenticity?
When the consumer scans the open tag with a smartphone, the product’s genuineness is displayed with a certain degree of detail. Other details from the manufacturer also come up — photos, videos, constituents of the product, how to use it, warranty, date of expiry. Once the protected tag is scanned, the consumer gets more details about the authenticity and the product. We also provide a way for users to communicate with the manufacturer via feedback forms. The user can also avail loyalty and referral points after scanning this tag.
How many products and companies has NeuroTags tied up with?
We are associated with around eight companies in various sectors in India, including Syska LED, Global Auto Implex and HyperExchange. We have one global brand on the verge of coming on board with more than a billion items a year. Five other international brands are in the sales pipeline.
Is NeuroTags profitable?
Not yet, but we look forward to turning profitable in a couple of years. Right now, our focus is on scaling the business. Currently, we are a team of around 18 members.
Are counterfeit products a large enough problem in India for this to be a viable business model?
The problem of counterfeiting is more than $1.6 trillion worldwide, as per the International Anti-Counterfeiting Coalition. It’s accelerating very fast, partly due to an increase in e-commerce. The counterfeiting figures in India are very high too. A study by FICCI found that 30% of automobile components in India are counterfeit. An AC Nielsen study found that 30% of FMCG business is lost to counterfeit products. That’s a large number. From toothpaste to aspirin and to high-end luxury brands, counterfeiting is everywhere. Customers are unknowingly purchasing these products, which can seriously affect their health and well-being in the long-term. For companies, counterfeiting affects the brand value and reputation. Sectors like FMCG, auto components, pharma, computer hardware, alcohol and electronics are the most affected by counterfeiting. The most dangerous, of course, is counterfeiting in the pharmaceutical industry — Assocham did a study and found that 25% of medicines available in the Indian market are fake or counterfeited. Delhi and NCR are the largest markets for fake drugs. The government is making efforts to curb counterfeits, and has introduced ‘track and trace’ technology for medicines. They’ve also decided to put all medicines on blockchain so the customer can track the journey of the medicine he is about to consume. Technology like ours will also help contain this problem.
Share of counterfeit products in various industries
Computer hardware – 50%
Auto components – 35%
FMCG – 30%
Pharma – 25%
Mobile phones – 20%
Source: Assocham, FICCI