Online luxury sellers strengthen counterfeit inspection amid Musinsa scandal

Korea’s online luxury sellers who have enjoyed the recent resell market boom are strengthening the counterfeit inspection process amid a scandal involving fashion commercial platform Musinsa, industry sources said Friday.

On April 1, Naver’s online reselling platform Kream announced that the Essentials T-shirts sold through Musinsa by the brand operator Fear of God were proven to be fake. Musinsa, which has strongly objected to the counterfeit claims raised by Kream and has warned of legal action, accepted the inspection result.

The company immediately suspended sales of Essentials T-shirts and said it would reimburse 200 percent of the cost to clients who bought the fake items.

“We will work with Korea Customs’ trade-related intellectual property rights protection association to strengthen the authentication process. The company will forge partnerships with global brands to directly buy and sell their fashion items that customers can trust,” Musinsa said in a statement, seeking to cut out intermediary distributors.

Luxury goods sales platform Balaan is considering acquiring a luxury goods authentication company to prevent counterfeit issues.

“We also plan to adopt nonfungible tokens technology to oversee the chain of distribution and look into other measures to tighten counterfeit inspection,” a Balaan official said.

Luxury sales platform Catch Fashion said it plans to create a strong system that prevents distribution of counterfeits. The company said it only purchases and sells genuine products from over 40 global retailers that have the rights to sell the brand items.

Mustit, a luxury sales platform, also operates in-house monitoring of sales vendors and products likely to be counterfeited.

The company said it verifies the identity of the vendors and requires them to submit certificates that prove the authenticity of the distribution process of genuine luxury products. Vendors who sell fake items are punished under both civil and criminal law, it added.

“Counterfeit issues can arise if sales platforms import products through multilevel supply chains. Even if Musinsa might have verified the first vendor, other intermediaries could have rigged the system with duplicates,” said an industry source who wished to stay anonymous.

By Byun Hye-jin (hyejin2@heraldcorp.com)