Musinsa's counterfeiting scandal pours cold water on online luxury market

Fake Essentials T-shirt sold on Musinsa's online shopping mall / Courtesy of KREAM

By Kim Jae-heun

A counterfeiting scandal involving Korea's largest fashion platform, Musinsa, has raised concerns among online luxury goods sellers that the recent incident could pour cold water on the rapidly growing online resell market, according to retail industry officials on Wednesday.

In January, Naver's online resale platform KREAM argued that Musinsa was selling fake apparel via its Essentials brand. Musinsa instantly refuted the claim by saying that it has confirmed an official authentication process with the global distributor of Essential. But its mother company, Fear of God, confirmed that Essential items sold at Musinsa are imitations.

“We knew such a scandal would break out soon. In the online luxury market, counterfeiting issues are inevitable and we have been striving to fight the problem,” an online luxury fashion mall official said.

Another luxury e-commerce firm also expressed concerns over customers becoming increasingly reluctant to purchase expensive brand-name products online.

“We fear that consumers may start to shun shopping for luxury goods at online fashion malls. Many started to lose faith in online luxury platforms after the Musinsa incident. In the end, it is important to win people's trust again by verifying our retail process transparently,” an online fashion mall official said.

Against this backdrop, Musinsa has promised to strengthen its process of verifying the authenticity of luxury products. The company said it will also expand business partnerships with designer labels directly, instead of receiving products through official retailers.

Online luxury goods platform Balaan is preparing to introduce a product warranty utilizing non-fungible tokens (NFTs) while collaborating with the Korea Appraisal Institute of Luxury Goods.

The company said it will pay the authenticity verification fee for luxury goods if customers request it.

Catch Fashion said it is free from the counterfeiting issue as it sells only products imported from international luxury goods distributors.

“Our system is different from other online malls as we receive items from designer labels' official retailers. When customers place an order online, our partner retailers send the items directly from Europe. We do not sell products through a third party or from unproven personal shoppers outside,” a Catch Fashion official said.