"Zero Tolerance for Label Swapping"... Musinsa Introduces AI Verification System

Investigation Launched Over Allegations of Label Swapping with Other Brands’ Products
Strict Sanctions Including Contract Termination for Violations
AI-Powered Product Similarity Verification System Under Development
Full-Scale Monitoring Planned for Over 1.2 Million Products

Fashion platform Musinsa is taking strong measures to counter the so-called "label swapping" (product label replacement) controversy raised about some brands on its platform. The company’s aim is to protect customers and strengthen a fair competitive environment in the fashion market.

On March 12, Musinsa stated, "To maintain customer trust, we will respond much more strictly than before if any brand is found to have engaged in 'product label swapping'." The company has taken follow-up action after online communities and customer inquiries raised suspicions that some sellers replaced the labels (tags) of other companies’ products and sold them as if they were self-produced or self-manufactured, even though the items were not produced or commissioned by the seller.

Musinsa has launched an immediate investigation procedure in accordance with its own safe trading policy. The company is currently requiring explanations from brands under suspicion, and has stated that if any policy violations or acts of deceiving consumers are confirmed, it will hold the brands strictly accountable, including the possible termination of their business contracts.

Under current law, platforms are classified as telecommunications sales intermediaries, so they face structural limitations that make it difficult to mandate pre-shipment product inspections of items sold by brands. Nevertheless, Musinsa has established technical and institutional safeguards to protect both customers using the platform and the many brands operating legitimately.

To begin with, Musinsa is building an online verification system that analyzes product similarities using in-house developed artificial intelligence technology. As soon as the system is completed, possibly as early as next month, Musinsa plans to review for similarities among more than 1.2 million products currently on the platform and operate a continuous monitoring system.

During this process, any brand suspected of label swapping will be required to provide an immediate explanation. If fraudulent activity is confirmed, Musinsa will take strong measures, including the complete removal of the seller’s products from its platform.

In particular, if a brand claims at the entry screening stage that its products are self-manufactured, but is later found to have changed its sales strategy and sold other companies’ products using label swapping, Musinsa will apply a zero-tolerance policy and permanently restrict business on all Musinsa platforms, including 29CM. Additionally, if the scale of customer damage from label swapping is deemed significant, Musinsa will consider the seriousness of the case and may take legal action, including criminal complaints.

A Musinsa representative said, "We see it as our responsibility to go beyond the role of a telecommunications sales intermediary and to create an environment where customers can shop with confidence," adding, "We will continue to strengthen our policies and technical responses to build a transparent fashion ecosystem where brands can compete fairly."

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