From Handbags To Wine, China’s Luxury Counterfeiters Flee To WeChat

No need to head to the Silk Market: counterfeits can now be purchased through dealers on WeChat. (Flickr/M i x y) Mobile messaging app WeChat is one of the most effective digital marketing channels for international luxury-goods giants in China, but its convenience can be a double-edged sword. According to a recent Chinese media report, it is also a massive breeding ground for counterfeit luxury-goods transactions. In early November, Shanxi Evening News published an article on the blooming trend of selling and buying a wide array of fake luxury goods on WeChat, from wine and spirits to eyeglasses, bags, clothing, and watches. The article’s author randomly interviewed several Chinese WeChat users, and was surprised to see many of them had at least one friend providing luxury-goods purchasing services on WeChat’s “Moments” feature, which serves as the app’s newsfeed, claiming to be “purchasing agents”. An example of an account selling fakes on WeChat. According to the article, one of these “purchasing agents”, Zhang Hua, got started in this line of work through a friend. Without the hassle of obtaining a business license or paying a seller’s fee to an online platform, all Zhang needs to do to run her business is simply register for a WeChat account, add a few representatives from the factories that manufacture the fakes to her friends list on WeChat and QQ, and share the luxury-item pictures they post on Moments on a daily basis. According to the article, When a friend on WeChat sees the pictures Zhang refers and would like to inquire about the products, she asks the interested buyer to "send the picture of the product they are interested in and inquire within," and directly transfers the buyer to the factories, which she allows to do all the consultation, including price quoting and answering questions. "My role is to bridge the two. After the buyer pays me after getting a quote, I ask the factories to ship the products. There are zero costs for storage and logistics, and I make profits simply from the price difference," said Zhang. The article points out that the clientele of a WeChat-based business like this are generally close acquaintances, so it is a relatively new way of operating a business, as opposed to online stores like Taobao. The direct use of strong links on a social media platform enables sellers to avoid paying fees to a third-party online platform. One reason WeChat triumphs over a physical store or websites like Taobao when it comes to offering “purchasing services”, according to an experienced seller in the article, is that Operating a physical store to sell Grade-A fake luxury goods is too risky because of the outrageous fine one has to pay when getting caught. What they generally do on Taobao is to digitally wipe off the logos and the brand names and assign items nicknames, such as ‘Chanty’ for Chanel and ‘P-brand’ for Prada. With the censorship imposed by Taobao, sales are usually limited. Moreover, sellers are at the risk of receiving negative reviews or having products returned by unsatisfied clients. On the contrary, the content on WeChat’s Moments is only visible within one’s circle of close acquaintances, so the possibility of being censored by the local Administration for Industry and Commerce is minimal. A CCTV report on the proliferation of fakes on WeChat. In addition to social connections, another seller, “Mr. Dai”, points out that in the world of WeChat, an account user’s identity is usually uncertified, yielding the “opportunity” for sellers to forge identities. The majority of the buyers on WeChat purchase fake goods knowingly; however, in rare instances, buyers looking for real goods are scammed into thinking they are buying authentic items from someone who bought it abroad. “You can upload pictures of stylish models or even of airports and customs forms to make people believe you work as a flight attendant or a student who is studying abroad, creating a false impression that you are truly a ‘purchasing agent’. ” According to the article, the virtual environment of WeChat is favorable for creating strong links as well as weak links; therefore, those who can create trustworthy images or identities as “purchasing agents” are more likely to successfully sell fake luxury-goods on the social media platform. It will likely prove difficult to regulate these types of underground deals. The Local Administration for Industry and Commerce in the region of Taiyuan, Shanxi Province, where the article was reported, indicates that they have never received claims about the “purchasing services” on WeChat. According to the article, since the WeChat contact list is made up of strong social links, any disputes arising out of the transaction are usually settled privately. On the other hand, this type of “purchasing service” has the unspoken rule of selling and purchasing counterfeits knowingly, so even if the goods are defective, the buyers are unlikely to file claims with a government agency. As for the Chinese government’s censorship, since there are no physical stores, it is fundamentally difficult to define an act of infringement merely based on sellers’ activities on WeChat.

Sectors

Insights

Company

From Handbags To Wine, China’s Luxury Counterfeiters Flee To WeChat