Strengthening Genuine Product Verification... Online Luxury Goods Take Flight

The online luxury market is rapidly growing by guaranteeing ‘product trust.’ Shinsegae and Lotte’s integrated online malls are actively targeting the MZ generation (Millennials + Generation Z), who are familiar with online shopping, by emphasizing the trust provided by traditional distribution channels, certification systems to preempt counterfeit controversies, and after-sales management.

According to the distribution industry on the 24th, SSG.com’s luxury digital certificate service, ‘SSG Guarantee,’ has increased luxury sales by 35% compared to the same period the previous year during about five months after its launch (August 26, 2021 ? January 22, 2022). The proportion of products with SSG Guarantee among total luxury sales reached 20%. SSG Guarantee is a type of quality certificate that certifies genuine products and enhances security by applying a non-fungible token (NFT) method. It was introduced to proactively respond to counterfeit issues related to luxury goods handled online.

SSG.com plans to introduce a premium luxury delivery service in the first quarter of this year, providing delivery services through secure vehicles and professional personnel. Within the year, it also plans to offer luxury secondhand trading (resale) services through collaboration with secondhand trading platforms. This includes connecting luxury secondhand transactions among SSG.com luxury order customers.

On the 21st, Lotte On introduced a ‘luxury vertical service’ that connects ‘luxury purchase ? counterfeit product damage prevention ? after-sales repair.’ To this end, it partnered with Luxury&All, a platform startup that connects luxury repair specialists and customers. When customers upload repair requests and photos, luxury repair specialists participate in bidding. Customers can select and commission a repair specialist considering price and ratings. The repair process and results can also be checked on the site.

Lotte On also introduced the luxury authentication program ‘Trust On’ in August last year. This program was introduced to prevent damage from counterfeit products and to provide compensation in case of counterfeit issues. Lotte On, sellers, and external organizations participate, and if a purchased product is judged to be counterfeit, compensation of up to twice the payment amount is provided. After the introduction of Trust On, luxury sales of participating sellers increased by 33.4% compared to the previous year.

The online luxury market is rapidly growing not only with existing large distribution companies but also with online luxury specialized platforms such as Must It, Trenbe, and Ballan joining in. According to market research firm Euromonitor, the size of the domestic online luxury market grew from about 1.0455 trillion KRW in 2015 to 1.437 trillion KRW in 2019 and 1.5957 trillion KRW in 2020. The industry estimated that the domestic online luxury market size exceeded 2 trillion KRW last year. A distribution industry official said, “The success or failure of the online luxury market will be determined by how free it can be from counterfeit issues,” adding, “Growth will be centered on channels that can guarantee trust in this regard.”