Brand fraud is rampant in e-commerce. Barry discusses brand protection.
Sramana Mitra: Let’s start by introducing our audience to yourself and to Brandefender.
Barry Adika: I’m the Co-Founder of Brandefender. We focus on brand protection in general. We are experts in cyber security. I used to be in retail and wholesale. I’ve been engaging with the big shift that’s happening in retail over the last few years.
We are seeing how retail is fading away and how online is taking over. One of the reasons that we created this company is, we decided that everybody online needs protection and any brand online needs protection.
Sramana Mitra: Let’s double-click down one level. Help me understand the technology in a bit more detail. How do you apply that technology? What is the customer problem you’re solving? Who are the customers?
Barry Adika: I used to own a store in New York City called The Limelight. The Limelight was an iconic store. It used to be a nightclub back in the 90s. It’s basically an old church located on 6th avenue.
I took this entire place and turned it into a department store of 36,000 square feet. I was dealing with over 400 brands directly. During this process, my business was slowing down because of online platforms.
Every platform started to get stronger. Amazon and eBay showed up. My business was starting to fall apart because traffic was slowing down. Customers used to come to the store, check for pricing, and buy it on Amazon. We had to be innovative.
The next step was to invest in a cyber security company back in Israel. I decided that the only way for any store to survive in New York City is to open an Amazon account and try to sell their inventory online. The only problem is that most of those accounts that have direct accounts with different brands are not allowed to sell their products online.
What they do is they’re opening accounts under different names. They post products and they’re violating the price of the brand in order to get more traffic online.
The story starts with me meeting the CEO of a very big company here in the US. This gentleman, finding his product on Amazon for $9, was upset. He got a call from the Vice President of Macy’s saying, “Why’s your product online for this much?” The CEO called Amazon and said, “I’m selling you direct over $30 million a year. I’m asking who this seller is and nobody is giving me an answer.”
At that time, he told me, “I wish that I had a company that can tell me who are the sellers on Amazon and can assist my legal team on how to enforce it.” This is how Brandefender was born. The need was to prevent violations on online platforms. From Amazon, it became Walmart, eBay, and other platforms today.