Is Eliminating Counterfeits in China a Pipe Dream?

On July 14, the popular Chinese beauty brand, Huaxizi, teamed up with the police to break up a major counterfeit den in Zhejiang, China. Tens of thousands of counterfeit products, including products from Huaxizi, SK-II, Dior, Estée Lauder and MAC, were seized and reported to be worth around $1.5 million dollars. More than 20 criminal suspects were arrested. According to relevant sources in Huaxizi, the brand discovered counterfeits in early 2020 and reported it to the police. In March, the brand also began recruiting chief anti-counterfeiting officers nationwide to deal with this ongoing problem, as there were 2,000 reports on various e-commerce platforms in June alone, including forged labels, packaging, or misleading designs.

The Jing Take:

Counterfeit products are mainly desired for their low costs, which are typically one third or one fourth the cost of the original price. In China, wearing and purchasing well-made counterfeits has been widely accepted. Consequently, the high demand for counterfeits has resulted in an endless supply of being offered on digital platforms, such as Pinduoduo, Taobao, Weibo, Little Red Book, and Douyin. However, when one counterfeit link becomes reported and deleted, another one will seemingly emerge instantly. Given that China is the manufacturing center of the world and possesses the resources and well-honed skills when it comes to creating counterfeits, there seems to be an equal match between high consumer demand and manufacturers willing to skirt the law to supply them. However, if counterfeiting is ever to be fully stopped, it would take serious involvement from the Chinese government, which in a COVID-19 world, seems very unlikely considering the boost it adds to the economy. So, until someone higher up decides to seriously crack down on this issue, fakes and shams will be sure to stay — and be on sale.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media. 


Market Analysis