Destruction of counterfeit goods in the Philippines

PARIS — “It’s focusing on the unglamorous but pretty insurmountable counterfeit problem,” said Vidyuth Srinivasan, cofounder and chief executive officer of Entrupy, a New York-based authentication start-up that in 2016 introduced its first artificial intelligence-based authentication technology geared to resellers and online marketplaces.

At the kickoff of Paris Retail Week on Monday, the company is set to unveil a new cutting-edge solution, dubbed Fingerprinting, geared at combatting counterfeits and return fraud.

The new technology, which is already being piloted by a number of suppliers and luxury brands, uses advanced computer vision techniques and microscopy to identify individual physical objects, from handbags to clothing, leveraging their minutiae and subtle differences.

Each item is scanned with a proprietary handheld device that records its unique features, often invisible to the human eye. Verifying a returned item operates much like identifying a person by their fingerprint, Entrupy said. New scans are compared to the originals as well as millions of other records in the company’s database, and the assessment is made using patented machine-learning algorithms.

The rise of e-commerce is testing relationships of trust “between the consumer as well as the business itself,” said Srinivasan, who explained that, as counterfeits continue to improve, the industry is seeing a rise in fake goods entering the supply chain through the returns process, which can lead to brands and stores inadvertently selling counterfeit goods.

“Large retailers are fulfilling e-commerce orders to people they’ve never seen before. That is creating an environment to commit fraud. What’s happening is, people buy authentic products from, say, Harrods and then when returning it, swap the original product with a fake. So they keep the original and they keep the money,” he said.

“The technology is based on the real-world philosophy that every single physical object has its own unique fingerprint.…In our case, based on surface data, we map that and store it,” said Srinivasan, adding that the technology can be used at any stage of the value chain, from the manufacturer and distributor to the retailer, reseller and law enforcement.

Launched in 2012, Entrupy counts among its investors the Tokyo-based Digital Garage and Daiwa Securities Group, as well as Zach Coelius, founder and former ceo of ad retargeting company Triggit.