China Launches Luxury Brand Appraisal Center to Tackle Fakes

    The new state-backed appraisal center signals China's commitment to tackling the problem, but solutions with more capacity and promise already exist in the private sector.
    The new state-backed appraisal center signals China's commitment to tackling the problem, but solutions with more capacity and promise already exist in the private sector. Photo: Shutterstock
    Huixin DengAuthor
      Published   in Technology

    China is the world's largest luxury market, and one where fakes are still rampant. It's a huge problem not only for brands, but also for Chinese shoppers willing to pay for the real thing who are plagued by doubts that their purchases may not be genuine. In response, the China Electronic Commerce Association (中国电子商务协会) has launched an official luxury brand appraisal center (奢侈品鉴定中心) in where items' authenticity can be evaluated. If luxury consumers have concerns about their appraisal report, they may resubmit it to the center for re-evaluation. The online portal is thorough, even allowing consumers to check an appraiser's qualifications by inputting his or her certificate number, a process comparable to conducting an employment background check in the United States. And luxury consumers can check if their sellers are certified businesses.

    The new appraisal center is the only state-owned service of its kind in China, and while it signifies the Chinese government's determination to combat counterfeit products, it's really just a small step.

    There are, however, several other ways to appraise luxury items in China.

    Independent Appraisal Centers#

    In addition to the government-backed China Electronic Commerce Association appraisal center, there are several private companies already performing the same function. While the name sounds official, and the business complies with China's regulations and rules, the China Certification & Inspection Group (中检集团), is one such private enterprise.

    Another company, XiZhen (犀真), is said to be the first appraisal center in China. It is based in Shanghai and specializes in appraising pre-owned luxury items. XiZhen is in fact a platform that brings together a group of luxury appraisal businesses and individual appraisers. It charges appraisal fees according to the luxury item's price. Fee starts from 200 RMB (31.50) for a luxury item worth 0-10,000 yuan (0-1,575).

    In-house Appraisal Centers#

    Secco (寺库), an e-tail platform selling second-hand luxury goods, has its own in-house appraisal center. The center is said to be the only official appraisal center authorized by China's 315 E-Commerce Trust Platform(中国315诚信平台), a Beijing-backed organization. Secco's in-house appraisal center has bases in Beijing, Shanghai, Chengdu, and Hong Kong, and hires appraisers both home and abroad (e.g. from the United States and Japan).

    Tmall also has its own in-house appraisal center, Jessica Liu, president of Fashion and Luxury at Tmall, told Jing Daily at New York Fashion Week. "Tmall has hired a team dedicated to doing luxury appraisal," she said. "We are also investing in blockchain technology. By the time the technology is fully developed, you will be able to scan your luxury bag and immediately know whether it is authentic or not."

    Liu said she is aware that counterfeit goods are pervasive in China's e-commerce ecosystem. "It is harder for us to examine counterfeit goods on Taobao because it is a C2C platform. [Taobao users] are all individual buyers and sellers, and we find it extra difficult to examine their stock one by one."

    Artificial Intelligence Appraisals#

    Built by a tech company in Beijing, Smart Detective (真探) is an app that uses artificial intelligence to appraise luxury items.Unlike other appraisal centers or appraisal tools that host appraisers, Smart Detective hires data scientists and scholars to assist in its product development.

    The main technology features graphical recognition algorithms, which allow the app to scan and examine a luxury bag's size, color, texture, shape, and more. Currently, the app is dedicated to appraising luxury bags and suitcases, but the company is also developing the ability to appraise watches and jewelry, according to tech news source 36kr.

    Louis Vuitton bags appraisal. Photo: Smart Detective
    Louis Vuitton bags appraisal. Photo: Smart Detective

    The Takeaway#

    • The real estate appraisal business has existed for a long time, and now luxury fashion appraisal services have become more and more popular in China
    • The government's appraisal center is based in Beijing, but to tackle such a large problem, similar centers could also be established in cities around the country
    • In addition to the state appraisal center, luxury item appraisals in China are conducted by independent companies and in-house appraisal centers.
    • Blockchain technology and artificial intelligence are being utilized to help improve the speed and accuracy of the appraisal of luxury brands.
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