China is known for having the largest market for luxury goods in the world, but it also has a thriving market for counterfeit products. This has created a high demand for experts who can differentiate between genuine luxury items and fakes. These experts, known as “luxury appraisers,” undergo training to identify fraudulent features on handbags, belts, garments, and other luxury items.
The domestic market for luxury goods in China is estimated to be worth around four trillion yuan ($620 billion), thanks to the country’s extensive production of luxury goods. With the increasing popularity of the second-hand luxury market, more and more people are looking for prestigious items at discounted prices. However, this market is also plagued by counterfeit products.
To address this issue, Zhang Chen, the founder of the Extraordinary Luxuries Business School, has developed a training course to help individuals identify fakes and appraise second-hand luxury goods. Graduates from his course gain the skills and knowledge necessary to navigate the growing second-hand luxury market.
The course fee is 15,800 yuan ($2,400), but Zhang believes that it is a worthwhile investment. The second-hand luxury market in China reached a value of 17.3 billion yuan in 2020, nearly double that of the previous year. Despite Chinese consumers purchasing a significant portion of the world’s luxury goods, the circulation rate of these goods is only three percent, which is much lower than the 25-30 percent seen in Western countries.
Zhang’s course teaches students various tricks and rules to identify genuine luxury products. For example, students learn that the lining of a black Chanel handbag should be pink, and specific letters in the Chanel logo should use a rectangular font instead of a square font. These small details can often help detect counterfeit products. Students attending the course come from diverse backgrounds, including a former fashion magazine editor and a bartender seeking a fresh start after being impacted by the Covid-19 pandemic.
One student, Xu Zhihao, a stock market trader, recognized the potential for selling second-hand luxury bags at a good price. Luxury bags such as a Louis Vuitton Neverfull handbag can still be sold at a 20 percent discount on second-hand platforms even after being purchased two years ago. Xu compares the sales logic of second-hand luxury items to the financial products he currently sells.
Condition and seasonality play crucial roles in determining the value of luxury bags. Appraisers pay close attention to scratches around the buckle, which may indicate previous use by an owner with long nails or regular manicures. Red-colored luxury items tend to sell quickly during Chinese holidays, as red is considered a color of good luck.
Interestingly, Zhang’s school has attracted former counterfeiters as students, as they aim to build on their existing skills but shift towards more reputable work. With his expertise and experience, Zhang can often determine whether a product is genuine or fake within 10 seconds. Some clients even send pictures of watches, trainers, and clothes for online diagnosis.
Luxury brands are introducing high-tech features to verify the authenticity of their products as technology advances. For example, Louis Vuitton has launched a blockchain platform called AURA to record its goods, while Salvatore Ferragamo has inserted microchips in the soles of women’s shoes. Burberry has also experimented with Radio Frequency Identification technology (RFiD) to identify tagged objects. Despite these advancements, Zhang is not concerned about the potential threat these technologies pose to his career. He believes that there will always be a demand for experts who can accurately identify luxury products.
Here are two useful links related to luxury appraisers and counterfeit luxury goods in China:
1. Luxury Appraisers in China: The Art of Detecting Fakes
2. China’s Luxury Second-Hand Market Booms as Brands Tap Online Platforms
