Fake Controversy of Parallel Imports Quashed with Single Punch

The government is encouraging parallel imports in order to reduce the price bubble of imported goods and induce reasonable consumption. Parallel imports enable third parties, not an exclusive importer in Korea, to import products which are legally distributed with legitimate labels in overseas markets. The total amount of parallel imports is estimated at about 2 trillion won per year (US$1.96 billion), based on data from the Korea Customs Service.

However, as a lot of consumers think that parallel imported goods are fake products, the Korea Customs Service has been implementing a custom clearance system to attach a custom clearance tag to parallel imported goods, so that consumers feel confident in purchasing such products.

Even after this system became effective, some small companies have distributed fake products to some online shopping malls, pretending that they are parallel imported goods. After all, the Korea Customs Service let its affiliated association, Trade-related IPR Protection Association (TIPA), be in charge of checking custom clearance items, as well as supervising and investigating the parallel import market.

As confidence in the online shopping market dropped sharply due to the new practices of counterfeit companies, Wemakeprice, a social commerce company, formed a task force for parallel imports, completely stopped transactions for 1,100 foreign brand deals, and obliged the verification system of parallel import custom clearance.

Furthermore, Wemakeprice concluded a business partnership with TIPA and joined its Parallel Import Subcommittee (PIS) as a special member. Wemakeprice, neither a trademark holder nor parallel importer, is the first online distribution channel company to join. Wemakeprice is creating a stable verification system for parallel import custom clearance through cooperation with TIPA in supporting good import companies, checking parallel importers and their products, and supervising import fields.

Wemakeprice only allows companies with custom clearance to be listed in their system for high risk product groups, including fashion products and accessories, in order to secure consumer confidence. Forty-four companies are participating so far, and the number of deals reached 109 by July, since April 21 when the custom clearance verification system became effective. Complaints from consumers disappeared, and there has been no inquiry regarding fake products so far.