Disgraced as a Channel for Counterfeits
Naver, Korea's largest portal site, has been dishonored by the European Union as a channel for counterfeits.
The Counterfeit and Piracy Watch List recently released by the European Commission includes Naver as one of the six e-commerce platforms to be watched.
“Counterfeit goods are offered through Naver Corporation’s shopping and social media services, including Naver Window Series (an online open market platform for offline store operators) and Smartstore (a platform for online shop operators),” the report says.
“Stakeholders, mainly from the luxury and fashion industry, reported that counterfeit goods can be easily found on Naver Blogs, Naver Cafes, and Naver shopping platforms by typing various keywords,” the report adds.
Noting that Naver does not prohibit the use of contentious keywords in the listings, it says searches for blatant terms (i.e. "replica" in Korean and English) and terms implying the products’ counterfeit nature ("A-class" and "mirror-class" in Korean) resulted in a high number of hits on Naver Window Series and Smartstore.
“The European Chamber of Commerce in Korea reported that a total of close to 50,000 notice and takedown requests were submitted to Naver Corporation by only 12 companies in 2017 alone,” the report notes, adding that this illustrates that Naver needs to improve its detection, and removal techniques, in order to decrease the sale of counterfeit products on its platforms.
In addition to Naver, five other e-commerce platforms were included in the watch list. They were Bukalapak, the most popular online e-commerce platform in Indonesia; the EVO Company Group, which manages marketplaces in Russia, Ukraine, Belarus and Kazakhstan; Lazada, one of the most popular online e-commerce (business to consumers) platforms in Thailand; Snapdeal, one of the most popular online e-commerce (business to consumers) platforms in India; and Xxjcy.com and China-Telecom, which are China-based business to business marketplaces.
Meanwhile, Naver said that it has been making efforts to prevent the sales of counterfeits on its site.
Naver believes that overseas individual sellers are a major distribution channel for counterfeits. So since August this year, it has restricted their entry into Smartstore since last August.
In particular, the company said, it is operating "Mystery Shopper," a secret crackdown operation, for individual sellers living in China and Hong Kong, which are the main sources of counterfeit goods. Those who are confirmed as fake sellers are immediately evicted.
"The EU included Naver in its watch list based on last year’s data. The distribution of counterfeit goods has decreased significantly since this year," said a Naver official. However, the company did not disclose specific figures.