Scrolling Instagram recently, a particular post prompted a pause. From the Singaporean newspaper The Straits Times, the social media entry showed a stylized Hermés Birkin Bag, a plush wool blanket and smooth leather gloves resting atop the recognizable handbag silhouette. The text overlaid on the photo declared: Returns on Hermés’ Birkin Bags nearly match those of S&P 500 investments.
Standard and Poor’s 500—commonly referred to as the S&P 500— tracks the performance of 500 top companies on the U.S. stock exchange. Long considered to be a safer, more consistent investment by both financial analysts and buzzy social media savings experts than, say, single stocks, the index has boasted an average annual return of approximately 10 per cent. By comparison, Sotheby’s reports the price of the Togo leather Birkin 30 went up 7.8 per cent in 2024 alone.
The lure of a potential investment asset—one that could be carried now before being sold for a profit years down the road—isn’t the only element driving the booming global resale market of luxury designer handbags. The secondhand luxury leather goods market, which includes handbags, wallets, belts and the like, was worth some $2.8 billion USD in 2023. That number is expected to grow to $3.8 billion USD by 2028, according to a recent report. Mari Corella, GM of global luxury at eBay, also points to attainability and sustainability as key factors contributing to the handbag boom.
“Nearly $50 billion worth of secondhand luxury products were sold worldwide in 2023, fuelled by younger consumers looking for accessible entry points into the traditionally exclusive luxury market,” Corella says. “Specifically, vintage products are trending across the platform, with global eBay users searching for ‘vintage’ over 1,000 times a minute on average. This shift reflects a broader cultural change where a younger generation of buyers recognizes that the designers they want to wear don’t have to be out of reach.”
With interest and values skyrocketing, the question of authenticity seems more relevant than ever. Especially as the improving quality of counterfeit luxury goods continues to be a problem for brands looking to safeguard their product integrity, and for customers who are looking to purchase authentic preloved designs. According to a 2019 article in Harvard Business Review, the counterfeit luxury goods trade accounts for some 60-70 per cent of the estimated $4.5 trillion USD luxury market. Counterfeit goods including handbags and even fine jewelry have become almost indiscernible from the authentic designs to the naked eye, prompting resale platforms to lean into tech innovation and artificial intelligence in an attempt to battle back against these “superfakes”.
The popular social commerce marketplace Poshmark, which sees users buy and sell items from their own closets, has noted a marked increase in the interest and sale of designer items in recent years. “Louis Vuitton, Gucci, Christian Dior, Chanel, and Prada are the top-purchased women’s handbag brands on Poshmark Canada,” says Janet Wong, director of Posh Authenticate. “Shoppers are turning to Poshmark closets and increasingly seeking higher-priced items for a great deal; just in September 2024, sales of Balenciaga items soared by 49 per cent year-over-year on Poshmark Canada.”
The platform offers Poshmark Authentication for all items priced over $700 CAD, according, to Wong. Items are sent from the seller to the company’s headquarters for a “pre-authentication process” done by a dedicated team of authenticators, as well as “machine learning,” to inspect logos, tags, hardware and materials for authenticity before the item is released to the buyer.
“The Poshmark Authentication team undergoes rigorous education and training to efficiently inspect luxury items,” Wong says. “Their ongoing development aims to create a stress-free selling and shopping experience, prioritizing trust and transparency at every stage.” She adds that the sale of counterfeit items are prohibited on Poshmark, stating that “sellers must ensure their items are authentic, and if a buyer suspects a product is counterfeit, they should contact Poshmark Support for review.”
At eBay, Corella notes that ensuring authenticity is a “number one” priority: “eBay Authenticity Guarantee ensures that consumers can purchase eligible items and designer goods with confidence, knowing they are verified by experts.” To date, eBay has authenticated more than 10 million items globally. “Our acquisitions of Certilogo and Known Origin were strategic moves towards empowering brands and designers to manage the lifecycle of their garments and increase trust when shopping secondhand fashion,” she says.
At the centre of the authentication conversation is artificial intelligence, like that used by the New York-headquartered company Entrupy. “AI is able to look at microscopic details as well as the holistic picture of the item that the human eye will never be able to,” says Jake Stewart, head of sales and marketing, Entrupy. “Traditional authentication methods tend to rely on the human eye, which has proven to be faulty over the years as it has become harder and harder to determine what’s real and what’s not. Not to mention, it has also become harder to find, train and scale the knowledge across human authenticators.”
Using its own AI technology, items are scanned using a proprietary Entrupy device and app to capture a set of microscopic images that are then run through the machine learning algorithms and checked against a “growing database of millions of similar images, including pieces that date back to the 1920s,” according to Stewart.
“As our inventory grows, our technology advances,” Stewart says. “To date, Entrupy has amassed over 50 million unique images of both authentic and counterfeit items. Based on the results of the initial comparison, the AI will either verify the item’s authenticity or return an ‘unverified’ result. Each scan from an Entrupy device becomes part of the database, further refining the algorithms and making our solution smarter and more accurate.”
Entrupy’s accuracy rate is 99.1 per cent, according to Stewart, who note the entire scanning process typically takes between 3 and 5 minutes. “In some instances, it can take up to an hour, and Hermès Premium items can take up to 24 hours,” he says. The authentication technology is currently being utilized by luxury resellers, pawn shops, department stores, online marketplaces and even luxury brands.
“With more and more technological advancements, the ability to manufacture counterfeit goods is getting easier and the quality is getting better,” Stewart says. “Not only are the counterfeits themselves getting harder to identify, but then we are seeing crimes like return fraud being committed where a person will purchase an authentic luxury good from a department store and then return a counterfeit item because these stores don’t have the correct authentication technology put in place.”
These elements, coupled with the booming business of luxury handbag resale, equals a growing demand for authentication services. A need that shows no signs of slowing down anytime soon.
“With instances such as The RealReal continuing to face legal scrutiny from Chanel over allegations of selling counterfeit items, there is an ongoing need for third-party luxury authentication to underscore the complexities of the second-hand luxury market,” Stewart says. In an effort to bring attention to the full scope of counterfeit goods—including the “direct and devastating impact on both workers and the environment”—Entrupy releases a yearly public report, titled State of the Fake. Says Stewart: “[It] looks at proprietary data along with the rare insights they have garnered from hundreds of thousands of AI-driven evaluations performed on products from around the world. To build awareness around the murky world of counterfeits.” —Aleesha Harris
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