Appraisers appreciated as worries over faux luxury items rise

Industry

Published: 14 Sep. 2022, 17:22

Appraisers appreciated as worries over faux luxury items rise

Park Won-beom, a luxury good appraiser at Koibito, examines a bracelet through a magnifying glass. [YOO JI-YOEN]

The business of authenticating luxury goods is growing as more high-end products are being sold and bought on a variety of platforms including online secondhand shopping malls.

Koibito, a company that deals with secondhand luxury goods, launched its authentication service in June and received more than 4,000 requests to authenticate products in the three months since.

The cost to get a product authenticated is around 9,000 won ($7) for requests made online, and ranges between 20,000 won to 50,000 won for in-person services.

“These two bags look the same, don’t they?” asked Park Won-beom, a luxury good appraiser at Koibito with 15 years of experience, as he showed two Chanel bags at the company’s office in Seocho District, southern Seoul, on Monday. “These days, knockoffs use almost the same material and weigh similar to authentic products, so you can’t tell them apart just by touching and looking at them. You have to look closely with a magnifying glass and examine the spacing between the letters on the logo.”

“About 30 percent of the products we receive for authenticating are determined to be fake,” Park added.

A knockoff bag, left, and a genuine luxury bag, right, have slightly different logos. [YOO JI-YOEN]

The market for authenticating real luxury goods has been growing more in recent years, due to the diversification of purchasing channels such as department stores, boutiques and outlets making use of online platforms and secondhand transactions. The resale trend, which refers to individuals purchasing luxury products and later selling them at a higher price, is also adding fuel to the authentication market.

The domestic luxury goods market has grown rapidly over the past two years as “revenge spending” boomed during the Covid-19 pandemic. In particular, e-commerce sites specializing in luxury goods such as Mustit, Balaan and Trenbe have reshuffled the market. The size of the domestic online luxury goods market was 1.75 trillion won last year, according to Euromonitor, a London-based market research company — an increase of 7.9 percent compared to the year before.

However, whether or not consumers can trust these online luxury goods sellers is a whole other question.

Musinsa and Naver Kream, both e-commerce sites that sell high-end and luxury goods, faced off over the authentication of a T-shirt in February. The two sites’ ability to authenticate products was put to the test as consumers questioned whether the same T-shirt from American luxury brand Fear of God, sold on both sites, was genuine. In the end, the brand singled out Musinsa’s product, saying that it was “difficult” to confirm that they were real. But as more products even from official Fear of God retailers like PacSun and Ssense were not confirmed to be genuine, consumers were left with nobody to trust.

A geuine bag, left, and a knockoff, right, have different fonts and spacing between letters on the brand logos. [YOO JI-YOEN]

In fact, reports of knockoffs are on the rise. The number of reported cases of suspected fake products among those purchased from the top 10 domestic e-commerce sites jumped 136.9 percent in two years, from 1,309 in 2018 to 3,101 in 2020, according to the Korean Intellectual Property Office.

Strengthening authentication measures for luxury goods became an urgent task for the industry. But the problem is: There aren’t many professionals fit for the job.

Tags on Fear of God t-shirts sold by Musinsa and Naver Kream. [SCREEN CAPTURE]

According to industry insiders, it takes at least five years of experience to develop an eye for distinguishing genuine luxury goods from their faulty counterfeits. Most companies that handle luxury goods in Korea hire appraisers from secondhand consignment stores. Even this is a very limited source of labor, and the competition to recruit appraisers is fierce.

Koibito has 45 appraisers currently, and the Korea Appraisal Institute of Luxury Goods, which started as a consignment business, now operates as a specialized appraisal company. E-commerce sites selling luxury goods mainly work with these two companies. Balaan operates an authentication service called Balaan Care, in partnership with Koibito, while Mustit entrusts the authentication of items suspected of being fake to the Korean Appraisal Institute of Luxury Goods.

An employee examines a shoe at Naver Kream's inspection center. [NAVER KREAM]

Some sellers of luxury goods operate their own authentication centers. Trenbe has hired about 40 appraisers at its in-house authentication center. The company also established an academy to train appraisers in April. Naver Kream is operating an inspection center with shoes experts, such as collectors of sneakers and people with experience operating shoe factories.

Other companies bring in outside experts to authenticate luxury goods.

Bungaejangter, a secondhand trading app, recruited Kim Han-moi, CEO of MOI Watch, known for custom watch manufacturing and consulting on luxury watch auctions, as an advisor. Musinsa is collaborating with the Trade Related IPR Protection Association to investigate all luxury products it imports.

Kim Han-moi, CEO of MOI Watch. [BUNGAEJANGTER]

New technologies such as digital warranties are also being used. SSG.com is attempting to build credibility by issuing digital guarantees using non-fungible token (NFT) technology that cannot be forged or tampered with. Each product is assigned a unique number, written on a digital card, that is then provided to the buyer when purchasing a product.

Lotte On is implementing the Trust On service with external partners to provide preferential treatment to sellers that verifying documents and samples of products.

A Musinsa employee examines a luxury bag. [MUSINSA]

Some say that trust in the industry itself should be pursued through joint authentication from these various sellers, companies and e-commerce sites.

“Private institutions have limits to their authentication capabilities, and internal inspection systems cannot be objective sometimes,” said Park Yo-han, head of ESG management at Balaan. “I hope that a third inspection and advisory body will be established in which public institutions and major business operators participate.”

BY YOO JI-YOEN [lim.jeongwon@joongang.co.kr]