Capture the 16 Trillion Won Market... Online Luxury Platform 'Ijeontugu' Battle

[Asia Economy Reporter Lee Seung-jin] Competition among luxury shopping platforms in the 1.6 trillion won online luxury market has intensified, leading to lawsuits. Smile Ventures, the operator of the luxury shopping platform Catch Fashion, has filed criminal complaints against three companies in the same industry.

According to the industry on the 8th, Smile Ventures submitted a complaint to the police against three companies?Balan, Trenbe, and Must It?accusing them of violations including copyright infringement, information and communication network violations, and violations of the Fair Labeling and Advertising Act.

Smile Ventures raised issues against these three companies for copyright infringement on online luxury platforms. These three companies allegedly scraped (crawled) photos and product information posted on overseas famous online luxury platforms such as Matches Fashion, Mytheresa, Farfetch, Net-a-Porter, and YOOX, and posted them without permission. These overseas platforms are official partners and official channels of luxury distribution with which Smile Ventures has partnerships.

A Smile Ventures official explained, “When the issue was recently raised, some platforms shifted the responsibility to sellers registered on open markets. However, the copyright infringement damage is so severe that even the overseas platforms themselves have directly protested to these platforms, making it a clear problem of platform operation.”

The three companies accused by Smile Ventures responded, “We have not yet confirmed the complaint, so we do not know exactly what points are being raised as issues,” and added, “We will review the details later and take legal action.”

Cases of Crawling on Overseas Platforms

The reason Smile Ventures legally challenged the unauthorized use of partner companies rather than its own platform lies in the unique nature of online luxury purchases. Most luxury products sold online are parallel imports or purchased through proxy buying, making 100% authenticity certification difficult. For consumers, ‘authenticity guarantee’ is paramount. Smile Ventures argues that selling products as if they are partnered with platforms recognized as official luxury distribution channels is a clear act of consumer deception.

Following the complaints against the three companies, Smile Ventures also planned a viral video for the second half of the year titled, “If it’s not Catch Fashion, doubt your luxury goods.” The video includes messages such as “If you operate a 200% counterfeit compensation system” and “If you are selling bags from Company C and Company H,” directly targeting the three companies previously accused.

The fierce competition among luxury shopping platforms is interpreted as a battle to seize leadership in the rapidly growing online luxury market. According to market research firm Euromonitor, the domestic online luxury market size grew from 1.0455 trillion won in 2015 to 1.6 trillion won last year, accounting for about 10% of the entire luxury market. It is expected to approach 2 trillion won this year.

Must It achieved a transaction volume of 251.4 billion won last year, growing at an average annual rate of over 80% since its founding in 2011. Trenbe and Balan recorded transaction volumes of 108 billion won and 50 billion won respectively last year, showing rapid growth. Smile Ventures plans to take the lead by raising the most important issue in online luxury purchases: the ‘authenticity guarantee.’

An industry insider said, “Trust is the most important issue in the luxury industry, and the fact that such lawsuits have arisen regardless of authenticity could be a significant burden on platforms,” adding, “As the luxury market is rapidly growing recently, competition will become even fiercer.”

This content was produced with the assistance of AI translation services.