Korean fashion platforms see rise in luxury counterfeit sales

Resell platform Naver KREAM’s authentication tag (left) and fake (right). [Image captured from Naver Cafe]

Sales of fake products copying famous brands are increasingly becoming a serious concern in South Korea as the number of individual transactions in fashion products grows. Although the country’s leading resale platform KREAM, operated by Naver Corp., verifies the products’ authenticity to detect these fakes, with recent cases of even this authentication being forged via fake packaging and tags, consumers are urged to be more cautious. Although fashion platforms are making a concerted effort to detect these products, they seem to be unable to prevent the ever-evolving fraudulent behaviors.

KREAM said Sunday that it recently discovered products sold on other online platforms with fake authentication. On another person-to-person trading platform, a sales thread stated, “I received a product from KREAM as a gift and want to resell it,” but the KREAM authentication tag attached to the product turned out to be fake.

“From the authentication to the tags on the clothing labels, they were all fake,” the company said. “People tend to think that KREAM’s authentication tag guarantees a product is authentic, and now they even forge tags to sell fake products as if they were authentic.” The second-hand trading platform where the recent problematic sale was posted does not provide any authenticity checks for fashion brand products.

“When you buy a product from KREAM, you can check the transaction history and you should ask the seller for their transaction history before you buy a product on another second-hand platform,” said a KREAM official. “Because it’s possible to buy one product and falsely authenticate the others, in this case it is still safer to buy from KREAM.”

KREAM is also considering legal action. “As there could be multiple manufacturers involved, it is difficult to identify them individually,” the official said. “Once we identify the manufacturer of the fake tags, we will hold them responsible for design theft, among other things, in order to protect our brand.” KREAM has already confirmed that a Chinese company is making the fake KREAM tags, according to sources.

Another peer-to-peer trading platform, Lightning Marketplace, is also striving to ensure authenticity, operating its Lightning Care service since December 2022 to address the issue of counterfeits as a large number of its second-hand transactions are in fashion apparel and luxury goods. The platform’s authenticity inspection center is in Seongsu, Seoul, with a total area of 1,750 square meters.

Lightning Marketplace did find a fake Chanel Gabrielle backpack via Lightning Care, with a counterfeit product placed in a genuine box and packaging in this case.

Tren:be, a luxury goods trading platform, is also expanding its second-hand trade business and has created an authenticity center in Korea to ensure product authenticity. The company said that the center conducted 116,515 inspections between January and July this year, during which it filtered out 569 fakes, or about 0.5 percent of the inspected products.

As online transactions increase, the number of counterfeit products that are being detected is also on the rise. The number of reports on online counterfeit products soared to 16,693 in 2020 from 6,661 in 2019, according to the Korea Intellectual Property Office. The number of counterfeit crackdown cases identified by online home monitoring groups also rose to 181,031 in 2022 from 126,542 in 2020.