Flood of fake K-pop goods disrupts local businesses: lawmakers

An influx of counterfeit K-pop merchandise is surging in tandem with the global rise of Korean popular culture, significantly disrupting Korea's consumer market — particularly impacting local sellers, lawmakers said Tuesday.

Lawmakers from Korea’s two main rival political parties said a flood of imported goods from China and other countries is undercutting local vendors by offering lower prices and using mainstream distribution channels. They warned that this worrying trend poses a threat to the country’s cultural industry, a major driving force behind Korea’s global influence.

According to Rep. Jeong Dong-man of the main opposition People Power Party, over 29,000 counterfeit goods were confiscated at concert and festival venues here from January to August. The data was provided by the Ministry of Intellectual Property.

The figure is more than eight times that of the whole of last year, when 3,576 counterfeit items were confiscated.

This year’s counterfeit items mostly included posters, photo cards, tumblers and key rings inspired by K-pop stars, accounting for 97.5 percent of all confiscated items. Apparel, bags and jewelry were also among the illicit products.

Jeong, a member of the National Assembly’s Trade, Industry, Energy, SMEs, and Startups Committee, said the ministry found that Seventeen was the K-pop group most frequently targeted by counterfeiters. Aespa, Tomorrow X Together, Enhypen and Babymonster followed.

Rep. Oh Sae-hee of the ruling Democratic Party of Korea said that the majority of domestic small and medium-sized enterprises (SMEs) reported having no countermeasures against the surge of counterfeit goods being sold online. She pointed to Chinese e-commerce platforms like AliExpress and Temu, which have now become popular e-commerce platforms in the country.

The lawmaker from the same committee cited a survey by the Korea Federation of SMEs, which found that 96.7 percent of local SME respondents reported “experiencing damage to their business due to Chinese e-commerce.” Among them, 79 percent said they had “lost the will to respond to Chinese e-commerce platforms' market expansion here.”

“Some counterfeit cosmetic products, strikingly similar in design to our Korean products, are being sold for a price one tenth the original of the products. Consumers understand those fakes as original products and purchase them. This shows that damage of intellectual property right violation is reaching beyond companies to consumers here," Oh said.

The transaction value of direct purchases from overseas online platforms in Korea rose to 8 trillion won ($5.6 billion) last year, up from 2.7 trillion won in 2019. Of that total, 61.4 percent came from Chinese platforms, according to Oh.

Oh said that Chinese imports valued under $150 are currently exempt from tax, prompting local SMEs to urge the Korean government to strengthen regulations. She added that the United States abolished its duty-free threshold for Chinese imports under $800 starting this year, while the European Union imposes tariffs on all imports valued under 150 euros, and Australia levies a 10 percent value-added tax on all imports valued under 1,000 Australian dollars.