Galleria department store in Seoul. (123rf)
Major retailers including Hanwha and Shinsegae are keen to jump into the e-commerce market for designer brands as existing online platforms struggle to beat a counterfeit luxury goods scandal.
Online outlets for designer brands such as Mustit, Balaan and Trenbe have seen a boom in Korea by offering amenities and lower prices than department stores or duty-free shops to the growing number of luxury consumers around the world. country.
These online platforms bring in branded clothing and other products from overseas designer boutiques, parallel importers and individual sellers, among others, but with the increase in sales volumes and counterfeits, there has become more difficult for them to search for counterfeit items.
In January, Naver’s online resale platform Kream announced that luxury fashion brand Fear of God t-shirts, which a consumer had purchased from Musinsa, the largest online fashion platform in Korea in terms of sales, and had tried to resell them on Kream, turned out to be fake.
Musinsa strongly denied the claim and threatened to take legal action, but ended up apologizing and refunding customers double the price they paid after Fear of God concluded that the T-shirts were indeed false.
Musinsa said it will improve its luxury product inspection system and expand its sales as an official brand partner, while Kream will be able to boast of its own inspection system, a key function of a resale.
Major online shopping malls Mustit and Trenbe rushed to release statements saying they were running round-the-clock monitoring programs, demanding product warranty documentation from sellers and encouraging design product inspection experts .
Balaan said he plans to acquire or partner with luxury brand valuation companies and plans to use non-fungible tokens to provide blockchain collateral on luxury goods.
But since it’s almost impossible to completely prevent shrewd counterfeit traders from finding loopholes, consumers must choose between paying less for luxury items at the risk of them being fake, or paying full price at department stores.
At this precise moment of crisis for online luxury sellers, affiliates of conglomerates that own national networks of department stores are taking steps to get a piece of the pie.
Hanwha Solutions Corp., which merged with department store operator Hanwha Galleria last year, has set up a luxury goods e-commerce subsidiary and is hiring retail experts to tap into the booming market.
The Shinsegae Group is developing online sales of designer items through ssg.com. The online retailer recently signed official partnership agreements with luxury brands and introduced a digital guarantee system using NFTs to prove that branded products sold on ssg.com are genuine.
Lotte Shopping’s online platform Lotte On has opened a beauty section that sells high-end cosmetics brands, saying it will later expand online sales of high-end fashionable products and items for the House.
As these large retailers import luxury brand products directly through their affiliate department stores, their authenticity is guaranteed, but product volumes are often limited and prices may be higher compared to parallel imports.
By Kim So-hyun ([email protected])