E-Commerce

AI is changing the way luxury resale functions and TikTok Shop wants a piece of it

Speaking with Retail Brew, analysts, CEO of AI-powered Entrupy, talk about the importance of AI in luxury resale.
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4 min read

As demand for luxury resale continues to grow, so does the tech to authenticate the products.

In 2023, the luxury resale market was estimated to be valued at ~$50 billion. The usual—and established—suspects at the forefront of the market include The RealReal and Vestiaire Collective, among others.

Each of the platforms guarantees they are dedicated to providing quality and more importantly, authentic products. But we know from experience, that’s always easier said than done. Even industry veteran The RealReal has come under fire from customers for fake products.

Enter: Entrupy, an AI-powered luxury authentication platform that leverages computer vision to identify counterfeits. Founded in 2016, the platform has raised millions of $$ and is quickly gaining prominence among retailers, and online resellers. It currently also has an ongoing partnership with TikTok Shop as the official authentication provider of pre-owned luxury handbags and sneakers for the platform.

Real it in: Ultimately, the company aims to build “a whole suite of solutions for the B2B world on a global scale,” co-founder and CEO Vidyuth Srinivasan told Retail Brew. “We allow businesses to authenticate products on demand, meaning if I’m a pawnshop, or I’m an online reseller [that] just received an item, what I can do using Entrupy is I can take the images of the item and add some metadata around [it]…and shift these images up to our app. It goes up to the cloud, and the cloud has machine learning algorithms fitting and making decisions on what it thinks in terms of whether something is certifiably authentic by us, or we couldn’t call something authentic. So if it is authentic, consumers tend to get a certificate, and that certificate is backed with a financial guarantee.”

While the tech certainly takes a lot of the guesswork out of the equation, making things a lot easier for resellers and retailers alike, when pitted against traditional authentication techniques that allow for a physical analysis by an expert, can it win consumers’ trust?

“Our basic thesis is that AI excels in finding relationships in data, which may be unseen, and it can be trained on authentic products to understand the sizes and relationships among features on the product’s surface,” John Harmon, CFA and senior analyst for Coresight Research, told Retail Brew via email. “AI and computer vision will be able to ‘see’ features or colors or relationships that are ‘off’ that even an expert cannot see. Still, computer vision cannot make a judgment on the feel of an item’s material. Since AI is not infallible, it should best be used in combination with a physical analysis by an expert.”

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Srinivasan, however, argues that Entrupy is unique even in the AI authentication space, having built a “track record” of authenticated products that he counts in the “millions” of items and secured “billions” of $$ worth of inventory.

“It is data that is used every day to train and improve what we already have,” he said. “So in a sense, we are a data company that captures both authentic and counterfeit products.”

Howdy, partner: But perhaps its biggest qualifier of credibility is its vastly expanding collaboration with TikTok Shop. While the partnership started off with just luxury handbags, it now also includes pre-owned sneakers. While TikTok Shop only officially launched the “preowned luxury” category in April, the platform has been driving revenue for resale companies since last year.

“In our own research, we know that influencers have a lot of trust with their customers versus some of the platforms [that] do have a trust gap where people aren’t always confident in the authentication practices of a platform, whether it’s selling from their own closet, or at least able to showcase an item and talk about the quality and any issues that you might see—like any wear and tear—that can lend credibility to a scale,” Claire Tassin, retail and e-commerce analyst at Morning Consult, told Retail Brew. “TikTok Shop has a unique space in the market.”

It makes sense then that resale is a key market for TikTok to tap into and Entrupy ended up being just the right partner for it. As the companies expand their relationship, Srinivasan said that’s not the end of it, although he declined to disclose any names.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

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