Naver Smart Store strengthens regulations on foreign sellers

A Busan Regional Customs official reveals counterfeit sneakers smuggled in from China to Busan on Aug. 26, 2021. Yonhap

By Kim Jae-heun

Naver, Korea's top web portal service operator, is strengthening regulations on foreign nationals selling items through its Smart Store platform, aiming to clamp down on the sales of counterfeit products, according to industry watchers, Wednesday.

Smart Store is an online shopping platform operated by Naver for small businesses.

Starting on May 4, Naver will allow only foreign national residents of Korea who possess business licenses to sell products on Smart Store. Foreign students and people who have stayed in Korea for only a short period of time will not be able to do business on Smart Store.

Currently, any foreign national can register as a merchant by verifying their mobile phone number ― even if they do not have a business license here.

“We had some restrictions with helping customers who purchased problematic products from foreign sellers, who later fled to another country. As a result, we decided to strengthen business registration conditions for foreigners to provide a safer shopping experience to our customers,” a Naver official said.

Problems involving counterfeit products on open markets like Smart Store have increased steadily here in recent years. Last year, 38 percent of fake goods caught by the Korean Intellectual Property Office were sold on open markets. Naver also uncovered 1,869 cases of counterfeit luxury items for sale on its Smart Store during the same period.

Naver also blocked Chinese nationals from newly registering as merchants on Smart Store last October. It also limited foreign nationals living outside of Korea from selling products on Smart Store.

“As a number of Chinese and Hong Kong citizens continue to register on Smart Store as merchants using false papers and sell fake products, we have decided to limit their business online. They will not be able to sell any types of items like fashion apparel, sports equipment or cosmetics,” a Naver official said.

Coupang, SSG.com and Lotte ON are also allowing only foreign residents of Korea possessing business licenses to do business on their open market platforms. They operate online shopping businesses mainly based on direct purchases from overseas, so the e-commerce firms have adopted strict regulations.

On the other hand, Gmarket and 11STREET are letting non-Koreans sell their products if they have verified themselves with any type of identification.

“As Naver took preemptive action to fight the counterfeiting issue on online markets, other e-commerce firms will follow,” an industry official said.