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TikTok, LVMH Work on Plan to Limit Fake Items Sold on the App

(Bloomberg) -- Luxury conglomerate LVMH is in discussions with TikTok and its parent company ByteDance Ltd. on a plan for limiting counterfeit products sold on the popular video-sharing app.

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The aim is to work together to achieve an “elevated shopping experience” as TikTok expands its marketplace globally, said Toto Haba, senior vice president of global omni-marketing for Benefit Cosmetics, a beauty brand owned by LVMH, Europe’s largest luxury company.

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The parent group also includes 74 other brands such as Louis Vuitton, Christian Dior, Givenchy, Tiffany & Co. and TAG Heuer. The luxury group has an agreement in place with Alibaba Group Holding Ltd. to fight fake goods on its online Tmall marketplace, Haba said.

The deal could be a major move to help TikTok Shop’s reputation among brands and shoppers in key new markets. The company fully launched shopping in the US last year and already has ambitious targets, aiming to increase the size of its American e-commerce business 10-fold to as much as $17.5 billion in 2024, Bloomberg has reported, according to people familiar with the matter.

Read More: TikTok Eyes $17.5 Billion Shopping Business on Amazon’s Turf (2)

A TikTok spokesperson declined to comment.

Online marketplaces like Amazon.com Inc., JD.com and Alibaba’s Tmall have long seen sellers hawking counterfeit products at very low prices, combating them with varying degrees of success. Such products deceive customers into paying for something inauthentic and deter brands from selling on the platform that hosts them because it can erode the value of the real product.

“It’s important for us to guard our IP” on TikTok Shop, Haba said. The company is already flagging suspicious-looking Benefit-branded products to the company. “TikTok and ByteDance seem much more willing to talk with us on that and set the right guardrails.”

In the US, TikTok Shop works as an integrated part of the social media app’s video feed — with select users and brands able to tag and sell products through their videos — and in a designated tab that looks more like a typical e-commerce site. In the first holiday shopping season for the effort, 150,000 merchants and creators posted videos during the month, including Black Friday and Cyber Monday, TikTok has said, leading to more than 5 million new customers.

There are a number of large brands like Benefit or fashion retailer Revolve that have been quick to sell on the app in the US, but many others have been slower to join the commerce operation.

Third-party sellers can list items that they don’t personally produce, sometimes at discount prices that can raise questions about whether the product is real, Bloomberg reported in September.

Read More: TikTok’s New Amazon Copycat is Full of Cheap Chinese Goods (1)

Pre-owned items are also sold. Take Louis Vuitton: The LVMH brand has a verified TikTok account and posts videos, but doesn’t list its own products. However, products labeled as Louis Vuitton still appear on the marketplace for US users. A search for the correct spelling of the brand name surfaces only one wallet that bears the brand name in the item description and a slew of non-branded handbags and other products. If you misspell the brand, using “Luis” instead, dozens of bags described as pre-owned appear on the TikTok Shop.

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