Fake Chinese products are spreading fast across Korea. Photo= Fake bags of Louis Vuitton, the luxury outlet. /photo=News1
Recently, the YouTuber ‘Freezia’ (Song Ji-ah)'s allegations that she wore fake designer clothing during filming or even on SNS posts went viral online. She admitted the claims from critics and promptly apologized for inappropriateness.

The allegation was first raised from eagle eye that a few designs she wore were yet to be launched, but could be found in online markets. It shows well how the fake goods are widely distributed.

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Online, paradise for fake goods?

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The pandemic has brought the online market to the fore. However, there are still who are hesitant to purchase online, and one of the reasons is the worries over counterfeit goods. According to the document the Lawmaker Gu Ja-geun(PPP·Gyeongbuk), a member of Parliament’s committee for trade, industry and energy, obtained from the KIPO, 120,000 cases of illegal counterfeit products were detected in 2020 alone.

Among those, 47,812 cases were sold through the open market and 32,304 cases were sold through SNS. Specifically, secondhand goods-exclusive platforms, Beongae (Lightening) Market (24,099 cases) and Hello Market (2284 cases) accounted for a large proportion. Fake goods were also found in major platforms such as Naver(Korea’s largest online service provider) smart Store , 1869 cases and NYSE-listed Coupang, 1560 cases.

A source familiar with the industry said “The tactics of distributing fakes online have become more sophisticated”. ”Recently, there have been many cases of illegal sales where acting- purchasing agents buy fakes, as if they were local products.” he added.

In fact, there was a case in one of the online platforms, where a Chinese registered himself/herself as Korea-based business and distributed fakes, as if the products were overseas direct purchase. Consumers have no idea they are being deceived until the fake arrives. It might be a bit early to jump to conclusions that all fakes in Korea are from China, but there is a clear reason why China is being suspected , whenever similar issues pop up.

According to the data from Korea Customs Service(KCS) last year, the number of cases fake bags were detected from 2017 to August 2021 was 1,866, to the tune of 467.9 billion KRW. Overwhelmingly, 97.9% were from China, according to KCS.

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Fakes viral online… Lack of ability to detect or lack of willingness to catch?

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Fake Chinese Sneakers sold at Korean open markets /photo=News1
As the number of victims of online counterfeit transactions continues to rise, some are voicing the need to hold the platforms accountable. Lawmaker Gu Ja-geun said “as virtual online purchases are seeing the growth, so is the fake goods” “Not only the public sector but also the platforms itself should tighten its strictness with a policy to be responsible for their business and reinforce the consumer protection”.

Counterfeit is the main problem in the e-commerce industry. This is because its near impossible to police all the products, poured into the market. Even if the thieves are kicked-out, it is difficult to prevent them from re-entering the market under another name.

The open markets, however, argue that its unfair. From their viewpoint, they are also victims of such fake goods, as the credibility might drop. Electronic commerce(E-Commerce) insist they have set up their own rules to police the fakes, roaming in the market.

Coupang, for example has a team dedicated to operate a 24/7 monitoring system. According to Coupang, they have started to utilize AI(artificial intelligence) technology to analyze the price of products and warn the possibility of fake goods, and also distinguish fake and real by analyzing images.

11st, Korea’s e-commerce platform established Post-monitoring system. An official from the 11st said “for the first time in the industry, we launched this system called ‘mystery shopping’, where the company itself purchases products, highly suspected of being fake ones, in order to evaluate first-hand whether its real or not”

eBay Korea, which operates G market and Auction, operates an office dedicated to eradicate counterfeits. If a customer files a report over a suspicious product within a year of purchase, G market and Auction will pay for the product and collect it for free and request for an evaluation. In addition, eBay refunds all fees customer charge if the purchase turns out to be a fake.

The problem is that assessment takes long time, and it always comes after the purchase is done. As fake goods are becoming more sophisticated and likely to set the price as close as genuine products , or settling it a slightly lower. It is becoming more difficult to police these blatantly obvious rip-offs.

Meantime, the lack of legal grounds in Korea is another reason for such problem. According to the ‘Act on consumer protection in E-commerce’ open markets are not subject to punishment , even if fakes were sold. The National Assembly is seemingly trying to amend the act and impose more responsibility and liabilities to the online platforms, but no concrete movement has been observed.

One of the sources said on condition of anonymity “It’s a challenge to stop the Chinese sellers joining the open market”. “In fact, we need more cooperation and support from the trademark holders in order to identify the counterfeit products” he added.