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Counterfeit scandals push customers away from luxury online shopping platforms

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Tren:be employees check the authenticity of luxury goods at the company's office in Seocho, Seoul, on April 6, 2021. Korea Times file
Tren:be employees check the authenticity of luxury goods at the company's office in Seocho, Seoul, on April 6, 2021. Korea Times file

By Kim Jae-heun

The number of shoppers using online luxury shopping platforms is rapidly decreasing after their brand image has been tainted due to recent counterfeit scandals.

In early April, the country's largest online fashion mall, Musinsa, was hit for selling fake apparel through the brand, Essentials. Essentials is a sub-label of the American luxury streetwear brand, Fear of God.

Last month, the local luxury shopping platform, Balaan, was also caught selling imitations of the Nike Air Jordan 1 Retro High Og X Travis Scott Mocha sneaker by a customer.

Such scandals have led many consumers to question the authenticity of luxury goods sold on the internet, thus avoiding online shopping platforms.

According to Mobile Index, a data analysis service, on Wednesday, the number of monthly active users (MAU) of local luxury shopping platforms including Balaan, Must It and Tren:be, dropped by up to 40 percent compared to its highest point last month.

Specifically, Balaan's MAU fell from 820,000 users in April to 600,000 last month while Tren:be's decreased from 700,000 users in March to 470,000 in June.

Luxury shopping malls here bring in most of the products they purchased from secondary vendors or have private dealers sell items on their open market. This gives online retailers a price advantage over local department stores or luxury boutiques. However, the authenticity of products being sold on the internet is not guaranteed.

"Due to the nature of the luxury shopping platform business, it is difficult to survive in the market if they lose consumer trust. One scandal can not only affect a company's business by losing investment but also strike a mortal blow to other firms in the same market. It is an urgent task to regain consumer trust," a luxury shopping platform official said.

Balaan recently established a special task force to examine all the luxury items sold on its platform while promoting a strengthened refund policy for counterfeit products sold by accident.

Musinsa also joined hands with the Trade-Related IPR Protection Association (TIPA) to scrutinize all the luxury goods they deal with before offering them to their customers online. TIPA is a local non-profit organization that was established to protect intellectual property.

Kim Jae-heun


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