If you ask any top executives from pharmaceuticals, alcohol, electronics, automobile, apparels, and FMCG industry about the key challenges they face, most likely one of them would be counterfeiting of products and their zeal to get this solved. And, this is what young startup from Pune NeuroTags promises to deliver with its algorithmically coupled tags which comes in open and protected forms. While the visible open tag on the product can be scanned by anyone with smartphone, the protected tag inside the product seal can be scanned by buyers. Both of these lead to better authenticity of the products.
The company rolled out these products in the market in January 2018 and till date it has acquired 8 clients in India, one of them is Syska LED. In an exclusive interview with TechObserver.in’s Shalini Shukla, Nitin Gupta, co-founder, CEO and CTO of NeuroTags says that the counterfeiting problem is worth $1.8 trillion and more than one million lives are lost due to fake medicines. So, we urgently need to address this problem. “We see the anti-counterfeiting solutions like NeuroTags becoming even more important as e-commerce further expand which will create more counterfeiting problem,” said Gupta.
How the idea of setting up NeuroTags came-in?
In 2017 we were watching a documentary on counterfeiting and realized this is a major problem. When we searched the market, we didn’t find any good solution that really works. And found that this a problem that every business wants to get solved. After months of brainstorming, we designed the solution which is foolproof and has the potential to completely eliminate the counterfeiting. The same solution also helps in offline data collection, track and trace, loyalty and referral programs.
Did you conduct any market research before setting up your startup?
Yes, before building the technology we conducted market research and it revealed some interesting facts. The counterfeiting problem is worth $1.8 trillion and growing. And companies are spending billions of dollars in finding the solution to this problem. More than 1 million lives are lost due to fake medicines. The problem is further accelerating due to e-commerce. The worst affected sectors are pharmaceuticals, alcohol, electronics, automobile, apparels, and FMCG.
How do you generate revenues?
We have tied up with some of the packaging companies to leverage their client base who are looking for robust anti-counterfeit solutions. We are working with some of the B2B focused accelerator programs from VC firms to leverage their connection to reach out the companies which require our solution. We are reaching out to decision makers in the companies directly with our marketing campaigns. We have pay-per-use model which is very economical for businesses.
How has been your business so far and what are your expectations from next financial year?
We rolled out in the market in January 2018 and till date, we have acquired 8 clients in India, one of them is Syska LED. Our services are not sector centric and can fit in any industry. We are actively in talks with some major brands in the country and abroad. We expect to close deals with them by coming year. We have also started our sales operation in the USA as we are getting a lot of interest from companies there.
What is the technology behind NeuroTags?
NeuroTags provides algorithmically coupled tags, namely open and 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 an indication of authenticity with a certain probability. Once a product is purchased, the buyer has access to the protected tag, which is protected by a scratch layer or is kept inside the product seal. After scanning the protected tag, the user gets the authenticity information with certainty and the product gets registered to the customer. Also, the user can avail warranty, loyalty and referral points after scanning this tag. The tags are connected, monitored and protected by algorithms and AI on the cloud in such a way that, if anyone tries to replicate the tags, it gets caught and the copied products get invalidated.
What challenges do you face in the sector?
Initially convincing the manufacturers about the new technology and ease of integrating it with their production line was difficult, we started with small pilots and seeing the results of pilots and ease of integration, companies started trusting us and we started getting orders in millions. Our consumer engagement is friction free and UX focused so we see the response rates of around 20% of the users, compared to the market average of 0.5 to 2%.
What are the five key trends that will impact this sector in 2019?
One major trend that we are observing is that most of the large companies have started allocating innovation fund, which helps them test new technology without taking a lot of risks, this would further accelerate as the mid-sized companies to start to realize the positive impact of innovation.
We see the anti-counterfeiting solutions like NeuroTags will become even more important as e-commerce will further expand, which will create more counterfeiting problem.
Companies which have burned their hands by trying to implement unsuccessful track and trace technology by themselves or with their service vendors, will start to look for out-of-the-box customizable products like ours for track and trace need and supply chain visibility.
Brands will start to focus more on consumer engagement and relationship building else they will start to bleed a lot more as retailers will promote the low-cost alternatives which will be flooding the market at the expense of quality.
Companies will start to focus on collecting more and more events in their supply chain as well as the consumer interaction data, so that leadership can take swift and better-informed decisions.