The rise of third-party authentication services in e-commerce

The rise of third-party authentication services in e-commerce

Staff Writer
Staff Writer
Pinduoduo Content Team
May 29, 2021

China is home to the largest population of big spenders willing to splash out for luxury goods online. The huge demand has in turn created an industry of sophisticated counterfeit producers out to scam consumers with fake products.

China has seen many third-party luxury authentication services emerge in recent years, as brand owners typically do not offer authentication services. Almost all second-hand online marketplaces also help users to verify the authenticity of their purchases. One industry expert has likened the dual role to being “referee and player at the same time.” Ironically, the quality of such services has been uneven, further damping consumer confidence.

Last month, local media reported a consumer in Guangzhou received conflicting authentication results for a Gucci leather belt he bought on an e-commerce platform. In another case, one third-party authentication service pronounced a Burberry dress purchased from a well-known marketplace to be fake, only for another service to verify the same garment as authentic.

Many service providers do not employ certified professionals, nor are the authentication results recognized by manufacturers and brands, said Zhou Ting, an expert in the field of luxury goods and CEO of researcher Yaok Institute. Such practices could damage the credibility of online authentication, she said in an interview with Beijing Business Today.

Even when platforms employ professionals for their authentication service, in most cases, they do not require the customers to send in the items for inspection. Instead, they determine the authenticity of the products based on the review of a few photographs. This may be partly due to cost concern. Online authentication services could cost as little as a few dollars and consumers can sign up for free trials.

A professional authentication institution should have an experienced team of members who have worked at luxury brands. Each item should also be examined thoroughly by the whole team before reaching a conclusion on its authenticity, according to Mei Yu, a WOSTEP certified international watchmaker.

PDD operates a nationwide secret test-buyer program. A team of secret buyers purchase suspicious products from merchandisers on its platform at its own cost. The products are then sent to the brands to check for authenticity.

The authentication helps PDD confirm counterfeit merchants. PDD will close the offending merchant’s store immediately and order the merchant to compensate the buyers in accordance with the platform’s rules on counterfeits.

Currently, PDD works with over 1,000 brands for product authentication. The company maintains regular discussions with the brands on their capacity and progress of product authentication so that it can tailor its test-purchase plans accordingly. This helps the platform safeguard the integrity of the buying experience.

E-commerce continues to develop and evolve rapidly, with more and more goods and merchandise being made available through online channels. There is a growing need for industry standards when it comes to the quality or rigor of authentication services to safeguard the interests of consumers and brands.

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