Defects Increase Driven by Misbranded ASINs and Online Returns

Our analysis identified two main contributors to the recent increase in defects. Firstly, increased detection from the Online Returns Centre contributed around 20ppm. Secondly, defects stemming from misbranded ASINs contributed around 44ppm. In Q2'23, misbranded ASINs accounted for 32% of defects, compared to 21% in Q2'22 and 18% in Q1'23. These misbranded defects are mainly concentrated on a few brands, with 5 out of the top 10 brands experiencing misbranding issues. We observed a larger spike in defects caused by misbranded brands in Q2'23 compared to previous quarters. This spike is attributed to factors like consumer demand, as popular cosmetic brands like 'Beauty of Joseon', 'Thrive Causemetics', and 'National Mah Jongg League' gained significant popularity on social media. Additionally, our lack of oversight on the issue led to a delayed response, with the matter being raised to ABP for takedown of misbranded ASINs only in late June and July.