This interview is part of our new Blockchain In Supply Chain Management series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and supply chain management.
In this interview we speak with Steve Kuh, CEO of BONAFI, to understand how his company is using blockchain to transform the supply chain management business, and what the future of the industry holds.
1. What’s the story behind Bonafi? Why and how did you begin?
SK: I was born and raised in Korea. Counterfeit fashion bags was an everyday experience in Korea when I was young, and I still remember how strange it was that almost every woman in buses and markets carried a Louis Vuitton or Chanel bag. I learned later that South Korea had once been a major exporting country of counterfeit fashion bags, contributing to the global counterfeit market. Today, most of the counterfeit products are produced by Hong Kong and China, according to a 2017 PriceWaterhouseCopper report.
The digital immutable ledger technology behind blockchain is uniquely suited for fighting this extensive counterfeit issue since the data written on the blockchain is unalterable by any means. The Bonafi solution records each step of the supply chain data to a Blockchain ledger – from the manufacturing of the goods to the point of final sale – which allows customers to confidently verify the authenticity of the goods. The name Bonafi comes from the word bona fide, which highlights our goal of preserving and protecting the authenticity of goods against their counterfeits.
2. Please describe your use case and how Bonafi uses blockchain:
SK: The Bonafi solution is based on using a Secure Tag, a silicon-baked chip coupled with NFC technology and Public Key Cryptography. It is a fool-proof, copy-protected, and cryptographic way of recording the authenticity through Blockchain technology. And importantly, the Secure Tag is non-copyable, circumventing the potential issue of having counterfeit Bonafi Secure Tags. During the process of manufacturing goods, this Secure Tag is inserted into a product, and scanned and tracked at every departure and arrival points of the supply chain. The customer can then scan the Secure Tag using an NFC-enabled phone or through online retail stores in order to gain access to this data and confirm its authenticity prior to making the purchase. Other benefits of using Bonafi services will include a reward system for loyal customers, engagement with consumers with suggestions on how to use the product, and a communication portal that will allow customers to engage with one another via product reviews and user experience.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
SK: The Bonafi solution has the potential to be applied to a variety of products, as it allows retailers to offer authentication of goods in ways that are customizable to their target market’s specific wants and needs. Such benefits include real-time tracking of goods from production to shipment, authentication reports, customer satisfaction and review, and sharing of user experience. For example, we have an ongoing relationship with Kobelli, an online fine jewelry retailer. As part of its warranty services, Kobelli customers purchasing one of their high-end jewelry lines are offered the Bonafi solution, through which they have access to the shipping departure, transit records of the goods and the original certificates of the jewelry.
4. What other blockchain use cases in supply chain management are you excited about?
SK: In the future, we would like to extend the Bonafi solution to track inventory goods for the military, travel baggage for the airline industry, and pharmaceutical drugs as required by the FDA. They all require tracking of goods as well as a simple, but secure way to authenticate goods even in an online medium. Furthermore, we plan to offer Bonafi store services that will have our own selected authentic products to allow customers to confidently make purchases online with proof of authenticity.
5. Where will Bonafi be in 5 years?
SK: Based on our revenue model, we plan to be a $500 million dollar company and staff 2,500 people all over the world in 5 years. Companies in retail and military would use our services to provide authenticity and tracking of the goods. Our conservative estimates show that Bonafi's success would reduce the counterfeit trade by approximately 10% within 5 years. This is still a very small dent in the total counterfeit marketplace that stands at $500 billion per year; however, it will be the first step in the right direction. I hope that our efforts will allow Bonafi to engage with various industries worldwide and make a significant impact on the reduction of counterfeit goods in international trade.