StockX is taking its counterfeit-fighting prowess south of the border with the opening of its first authentication center in Mexico.
Located in Mexico City, the new site is StockX’s 14th authentication center worldwide. The streetwear resale platform says that the facility will foster increased access to local supply and faster shipping for buyers, and allow local sellers to get paid more quickly while taking advantage of bulk shipping and drop-offs.
StockX authentication centers are a significant node within the company’s overall supply chain. Sellers ship their products to these locations, where StockX quality assurance experts verify their condition, packaging and authenticity. The company also uses machine learning to assess product risk, before sending the merchandise to the buyer.
The resale company of sneakers, streetwear and now women’s luxury footwear says that more than 1 million products are inspected by StockX authenticators every month. StockX, which has opened four new authentication centers since the start of 2021, said it rejected nearly $100 million worth of products that didn’t meet its stringent verification standards in 2022 alone.
“The launch of this new authentication center in Mexico signifies our commitment to providing a safe and secure experience to our buyers and sellers around the world,” said Greg Schwartz, co-founder and chief operating officer at StockX. “Not only does this localized service allow us to meet increasing demand across the region, but it also ensures we can deliver on our promise to be a trusted global marketplace for current culture. We’re always working to up our game, and investing in facilities, people, technology and processes that serve our community will help us build a strong foundation for growth in Latin America.”
While another authentication center is a positive development for StockX, the company has been under the microscope for allegedly letting counterfeit products slip through its checks and balances.
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StockX is currently in a lawsuit with Nike over various allegations including counterfeiting, trademark infringement and false advertising. In the suit, Nike alleged that it bought four counterfeit pairs of shoes on the StockX platform. In December, StockX called out Nike for the claims against its authentication process, saying that the Swoosh had not provided discovery on “related or identical claims” made by other secondary marketplaces.
“Verification is the new authentication, but our comprehensive approach remains unchanged,” StockX said in a public statement when the change occurred. “While product authenticity remains core to our analysis, our verification process is a better reflection of our broader value proposition that we provide customers by reviewing all products sold on StockX.”
According to StockX, 14 percent of projects rejected by the company between June 1, 2021 and May 31, 2022 are fake products—the fourth-biggest reason after manufacturing defects (24 percent), a damaged box (20 percent) and used product (16 percent).
StockX is not alone in having to fight off counterfeiting and pirated goods, a market that is now estimated to be up to $3 trillion worldwide, according to the Organization for Economic Co-operation and Development (OECD). The marketplace had to take down various Nike sneakers that it felt may have been connected to an $800,000 cargo theft in Memphis, the Tennessee city plagued by rampant retail crime.
And with such a wide breadth of fake product being manufactured and sold, secondhand sellers have to be cautious of not just the merchandise that they offer, but the promotion of their authentication capabilities in general.
For example, luxury consignment marketplace The RealReal had to pay $11.5 million to settle a class action lawsuit alleging that the company’s authentication process “fell far short of its description” before it went public in 2019.
More businesses like Poshmark and Entrupy entered the sneaker authentication realm as the resale market continues to rise and counterfeiting becomes a bigger problem, while eBay acquired Sneaker Con’s authentication business to beef up its verification capabilities.
While a reliable authentication process is becoming more of a must-have, StockX has sought to build out more enhancements to its Mexico business. Customers in the market already had access to buy and sell products on the StockX catalog, which now features more than 200,000 items ranging from sneakers, collectibles, and electronics to apparel and accessories, the company says.
But in 2022, StockX enabled Mexican consumers to access the online marketplace via compatible language and currency. Additionally, the proprietary All-In Pricing feature is built to match Mexican buyers and sellers in order to further improve shipping times and fees.
“Mexico City is home to a highly engaged community of sneaker and streetwear enthusiasts who already rely on our platform for access to coveted products and brands. That, coupled with the city’s rich history in art, music, and culture, made it the perfect place for us to plant roots,” said Rodrigo Mazal, director, Mexico and Latin America at StockX. “There is growing demand for the StockX platform across Latin America, and our first authentication center.”
Based out of Detroit, StockX has sought to gain more of an international foothold, operating authentication centers out of Berlin; Tokyo; Toronto; Melbourne, Australia; Hong Kong; and London among others. The company said in January that 50 percent of trades in 2022 came from international sellers. The platform, which calls itself the “stock market of things,” has processed sales in more than 200 countries and territories.
In 2022, the marketplace surpassed more than 12 million lifetime buyers and has overseen more than 40 million lifetime trades. Since the start of the pandemic, “hundreds of thousands” of first-time sellers started using StockX, and it now has more than 1.5 million lifetime sellers.