[Invasion of Counterfeits]① Kim Keonhee's Chanel Bag for 400,000 Won... Sleepless City of Desire Ablaze [Reportage]

"Counterfeit Mecca" Saebit Market in Dongdaemun: A Field Report
Luxury Brand Bag Fakes Sold for 100,000 to 400,000 Won

Editor's Note
The global counterfeit market is valued at 2,000 trillion won. Fake products are becoming more sophisticated, and their distribution is growing bolder. It is not only high-end luxury brands that suffer losses. While consumers remain silent about counterfeit goods, K-brands that have entered the global market are being copied in the same way. Local brokers are preemptively registering trademarks, blocking market entry, and companies are being discouraged by enormous legal fees. In the borderless online marketplace, there are clear limits to enforcement and monitoring. Asia Economy investigated the explosive growth of the counterfeit market since the COVID-19 pandemic and explored measures to prevent copycat products of K-brands that have made waves in the global market.

On a drizzly night last month in front of Dongdaemun Digital Plaza (DDP) Station in Seoul, dozens of bright yellow tents lined up in front of darkened shops just past midnight. Large vans were parked bumper to bumper along the road in front of the tents, tightly shielding them from view. Some vehicles had paper covering their license plates, adding to the sense of secrecy.

This area, illuminated between closely packed cars, is a "counterfeit night market" that operates daily from 10 p.m. to 2 a.m. That night, a woman in her 30s said, "The genuine products are too expensive, so it's a burden," as she purchased a counterfeit 'Goyard Saint Louis Bag' for 150,000 won. Considering that the genuine product costs between 2 million and 3.5 million won, the counterfeit is about 15 to 20 times cheaper.

A view of Saebit Market taken from the opposite sidewalk. The large van is loaded with numerous items suspected to be counterfeit goods. Photo by JaeHyun Park.

"No use cracking down"... Chanel, Gucci, and Celine products sold for around 100,000 won

This market is called "Saebit Market," meaning "the yellow tents shine at dawn." It is one of the most well-known offline counterfeit markets in Korea. In 2016, the Jung-gu District Office granted road occupancy permits to street vendors on the condition that they comply with trademark laws to revitalize the Dongdaemun Night Market. However, it has since become a "counterfeit mecca" where both locals and foreigners gather to buy fake goods.

Inside the tents, luxury brand bags, clothing, and perfumes-like those found on the first floor of department stores-were densely displayed. Hard-to-find French luxury items such as Chanel's "Coco Handle Flap Bag" were available in various colors. Even the Chanel bag associated with Kim Keonhee, the wife of former President Yoon Sukyeol, was on display-the same flap bag that Jeonseongbae, known as Geonjin Bopsa, allegedly gave to her.

Counterfeit Chanel products sold at Saebit Market. Sellers claimed the products were "genuine" to entice buyers. Photo by JaeHyun Park.

Luxury brand bags from Miu Miu, Celine, and Gucci are displayed. A sale is also underway. Photo by Jae Hyun Park.

The price of the handle flap bag was 400,000 won. It could be purchased for about 1/25th the price of the genuine Chanel bag, which sells for over 10 million won at department stores. Upon closer inspection, such as the poor finishing and stiff leather, it was clear the product was counterfeit. However, under the dim lighting, there was little noticeable difference compared to photos of the genuine item.

The "Triomphe Bag" from French luxury brand Celine was also nearly identical to the real thing both inside and out. The on-site price was 170,000 won, while the department store price is over 6 million won-more than 30 times higher.

Last year, 4,794 counterfeit items were seized and 18 vendors were prosecuted at Saebit Market. This year, 296 items have been seized and 5 vendors prosecuted so far. Despite efforts by the Korean Intellectual Property Office, police, and other agencies to form investigative task forces and conduct joint crackdowns, the night market continues to operate.

Efforts to shut down offline counterfeit markets... but counterfeits are rampant online

Counterfeit goods distributed in Korea's offline markets are managed by the Trademark Special Judicial Police, a dedicated investigative unit within the Korean Intellectual Property Office. Under the Special Judicial Police Act, this unit investigates trademark, design, and unfair competition cases as criminal offenses and refers them to prosecutors. The unit started with 11 members in September 2010 and has since grown to 28. They collaborate with local governments to crack down on small-scale vendors and take administrative actions, and have recently been targeting online counterfeit sellers as well.

As a result, the size of the offline counterfeit market has been decreasing. Last year, 74 people were prosecuted by the offline trademark police, down more than half from 194 in 2020. In terms of the value of genuine goods, the figure was about 9.5 billion won-roughly a quarter of the peak 34.2 billion won in 2021.

The problem is the online market, which has grown explosively since the COVID-19 pandemic. According to the Korean Intellectual Property Office, in 2019, the online and offline counterfeit markets in Korea were about equal in size. However, after the pandemic, as more consumers turned to online shopping, the online market now accounts for about 90% of the entire counterfeit market. In particular, the distribution of counterfeit goods through live broadcasts on overseas social networking services (SNS) such as YouTube, TikTok, and Instagram has surged recently.

<To be continued in Part 2: The Counterfeit Invasion>