Gucci Employee in Shanghai Arrested for Reselling Stolen Bags ​​

What Happened: Things are not all Gucci at the Italian label’s Shanghai location. A former store clerk has been detained by police on suspicion of embezzlement after secretly selling merchandise on resale platforms and replacing the stolen items with counterfeits.In September, a Gucci store in the Jing’an District reported that it had identified multiple fake leather bags in its inventory during a spot check. The police then organized an investigation and soon discovered that the employee in question had purchased five lookalike bags and sold the real products online for 3,000 to 5,000 yuan cheaper, claiming to have an employee discount. The suspect has reportedly made over 57,000 yuan ($8,900) since May.The Jing Take: While China has long struggled with counterfeits and copycats, this problem is typically associated with bootleg stores and online purchases. For fakes to be found at official stores naturally hurts the brand’s reputation and chips away at consumer trust: How do you know you’re not shelling out thousands of dollars on a fraud?As such, the news took Weibo by storm, with the related hashtag gaining over 430 million views as of Friday. Netizens were quick to poke fun at the situation, with one comment reading: “So, the one who went to the counter bought a fake bag at a higher price, and the one on Xianyu (Alibaba’s secondhand platform) bought a real bag at a lower price.”Despite cases like this, the tide is turning in favor of international brands. Earlier this year, Chinese police shut down an elaborate Louis Vuitton counterfeit operation, arresting nearly 40 people, including a Louis Vuitton salesperson, for racking up $15 million in forged bags over a four-year period. Meanwhile, Chinese courts have pushed for stronger IP protection, with American sportswear brand New Balance being awarded $3.85 million in damages in January for infringement of its “N” logo and Burberry winning a rare preliminary injunction against the Chinese company Baneberry the following month.Given the resale value of Gucci products — selling for 2.3-times more than other comparable brands, according to The RealReal — its war with fakes sees no immediate end. Besides monitoring store employees and doing spot checks, Gucci and other luxury brands must step up measures to ensure authenticity; this may mean going beyond the use of NFC sensor chips (which were actually used in the aforementioned Louis Vuitton scheme) and considering blockchain technology to assign each item a unique digital identity. Yet, until usage becomes more widespread, consumers may want to learn how to spot a fake for themselves, just to stay safe — which is, sadly, easier said than done.The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Gucci Employee in Shanghai Arrested for Reselling Stolen Bags ​​

What Happened: Things are not all Gucci at the Italian label’s Shanghai location. A former store clerk has been detained by police on suspicion of embezzlement after secretly selling merchandise on resale platforms and replacing the stolen items with counterfeits.

In September, a Gucci store in the Jing’an District reported that it had identified multiple fake leather bags in its inventory during a spot check. The police then organized an investigation and soon discovered that the employee in question had purchased five lookalike bags and sold the real products online for 3,000 to 5,000 yuan cheaper, claiming to have an employee discount. The suspect has reportedly made over 57,000 yuan ($8,900) since May.

The Jing Take: While China has long struggled with counterfeits and copycats, this problem is typically associated with bootleg stores and online purchases. For fakes to be found at official stores naturally hurts the brand’s reputation and chips away at consumer trust: How do you know you’re not shelling out thousands of dollars on a fraud?

As such, the news took Weibo by storm, with the related hashtag gaining over 430 million views as of Friday. Netizens were quick to poke fun at the situation, with one comment reading: “So, the one who went to the counter bought a fake bag at a higher price, and the one on Xianyu (Alibaba’s secondhand platform) bought a real bag at a lower price.”

Despite cases like this, the tide is turning in favor of international brands. Earlier this year, Chinese police shut down an elaborate Louis Vuitton counterfeit operation, arresting nearly 40 people, including a Louis Vuitton salesperson, for racking up $15 million in forged bags over a four-year period. Meanwhile, Chinese courts have pushed for stronger IP protection, with American sportswear brand New Balance being awarded $3.85 million in damages in January for infringement of its “N” logo and Burberry winning a rare preliminary injunction against the Chinese company Baneberry the following month.

Given the resale value of Gucci products — selling for 2.3-times more than other comparable brands, according to The RealReal — its war with fakes sees no immediate end. Besides monitoring store employees and doing spot checks, Gucci and other luxury brands must step up measures to ensure authenticity; this may mean going beyond the use of NFC sensor chips (which were actually used in the aforementioned Louis Vuitton scheme) and considering blockchain technology to assign each item a unique digital identity. Yet, until usage becomes more widespread, consumers may want to learn how to spot a fake for themselves, just to stay safe — which is, sadly, easier said than done.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.