Imports of counterfeit luxury goods rise as travel normalizes

Fake luxury brand products confiscated by the Incheon Regional Customs. [Photo by Yonhap]

Imports of counterfeit luxury goods are surging again in South Korea after plummeting during the Covid-19 pandemic.

According to Korean Customs Service data obtained on Monday by Representative Han Byung-do of the Democratic Party of Korea, who is a member of the National Assembly’s Planning and Finance Committee, the amount of counterfeit goods infringing intellectual property rights (IPR) totaled 563.9 billion won ($427.56 million) in 2022, up 2.4 times from 2021’s 233.9 billion won figure.

Most of the counterfeit luxury goods distributed in the country are made in China.

Although imports decreased during the pandemic as trade was restricted, they increased back to their previous levels as cross-border travel normalized. The Korea Customs Service also minimized in-person inspections during Covid-19, leading to a lower number of crackdowns on counterfeit goods.

The amount of IPR infringement detected by the Korea Customs Service increased to 521.7 billion won in 2018 and 660.9 billion won in 2019 but was more than halved to 260.2 billion won in 2020 and 233.9 billion won in 2021 during the pandemic. As Covid-19 subsides, the number of seizures is now back to 2019 figures.

Of the seized items, watches accounted for the highest amount detected last year at 320.5 billion won, followed by bags at 177.5 billion won, clothing at 35.5 billion won, and shoes at 14.5 billion won.

As people start leaving their homes and returning to activities outside, demand for counterfeit luxury goods such as watches, bags, clothing, and shoes is on the rise again.

Rolex was the most sought-after counterfeit luxury brand by Koreans over the past 6 years.

From 2018 to the first half of this year, the total amount of IPR infringement detected by the Korea Customs Service amounted to 2.43 trillion won. Of this amount, Rolex accounted for the largest portion of 306.8 billion won, followed by Louis Vuitton (238.8 billion won), Chanel (137.9 billion won), Burberry (88 billion won), and Gucci (76.6 billion won).

Additionally, Hermes (63.7 billion won), Moncler (36.8 billion won), Goyard (30.6 billion won), Prada (28.3 billion won), and Nike (26.4 billion won) were among the top 10 counterfeit brands. These 10 brands alone accounted for 1.34 trillion won in IPR violations.

Although the number of IPR infringement cases fell significantly to 157 cases in 2022 from 282 cases in 2018, the amount of infringement increased, indicating an increase in the smuggling of counterfeit goods. The average detected amount per case for bags rose significantly to 5.15 billion won in the first half of 2023 from 876.9 million won in 2018.

“Counterfeit products are a clear criminal offense and deceive consumers,” Han said. “As smuggling is becoming a large-scale trend, customs authorities should take thorough measures to protect consumers.”