For more than a decade, Sproxil’s mobile authentication technology, called “Defender,” has helped consumers detect counterfeit medicines. Now the US startup is using its technology to spot fakes in all kinds of industries — from agriculture to beverages.
Ghana-born entrepreneur Ashifi Gogo, who moved to the United States in 2001 as a student, founded the company in 2009 to tackle the problem of counterfeit medication in Africa. The continent accounted for 42% of all cases of fake or substandard medication reported to the World Health Organization between 2013 and 2017.
Sproxil’s approach is simple. Manufacturers package goods with a scratch-off label that conceals a unique code. Consumers can scan that code, free of charge, on Sproxil’s app, which tells them immediately whether the product is authentic or not.
The service is paid for by manufacturers. In return, they’re able to protect their customers and brand reputation, and receive information about the location of counterfeit products.
Gogo soon realized that Sproxil’s technology offered a solution for products beyond the pharmaceutical industry.
Counterfeit goods worth about $400 billion are sold each year in other sectors. Gogo said that drinks brands are often targets.
As the middle class has grown across Africa and Asia, consumers have developed a taste for Western beverage brands, leading to a surge in counterfeit products, he said.
Sproxil has partnered with the Pure Heaven brand, which sells non-alcoholic wine and other sparkling drinks in over 80 countries. “In Nigeria it is a household name and counterfeiters go after successful brands,” Gogo said.
Obianika Okafor is general manager of J.I. Ejison International, which sells Pure Heaven products in six west African countries. “Counterfeiting was a massive problem for us because sales were slowing down and we were losing the goodwill of our customers,” he told CNN Business.
Around 10 million Pure Heaven beverages now bear the Sproxil scratch codes. “The sales volumes are up again and people are generally happy with the products,” Okafor said.
Since its launch, Sproxil has worked with more than 300 brands and companies, including Bacardi, Diageo (DEO) and GlaxoSmithKline (GLAXF), to identify 2.5 billion items as authentic.
The company, which operates in five African countries as well as India and Pakistan, has raised $4 million in investment.
Sproxil plans to focus on Africa’s counterfeit liquor market next.
“Similar to the pharmaceutical sector, counterfeit beverages have resulted in the loss of human lives,” said Gogo.
A study by market research company Euromonitor International of eight African countries found that 13% of alcohol consumed was counterfeit, or sold under unregistered brands.
“[Counterfeiting] causes genuine economic losses which hurts foreign direct investments and stifles innovation,” Gogo said. “[We] will start by working closely with regulators in creating awareness to the general public on the risks associated with consuming suspicious beverage products.”
Sproxil is also planning to launch incentive schemes that reward consumers for buying authentic products instead of fake ones, said Gogo. His aim is to reinforce the idea that shoppers, as well as manufacturers, benefit from choosing the genuine article.