China has long been known for their cheap goods that are found in stores and online. However, many of these goods were brand rip-offs or were pirated. This affected numerous people, specifically those brands trying to make a name for themselves in the Chinese consumer market.
Case in point, Wang Wenwen, a Beijing resident, purchased a dress online that was supposed to be the Chinese brand Five Plus. However, after receiving this dress, there was no label, the materials of the dress were cheap, and it left a bad taste in the mouth of Wenwen. Now, Wenwen does not do business online for clothing, instead choosing to go to a physical store for these items.
This situation is familiar, as it is happening all over China. That is why the government is trying to stop the production of counterfeit goods online. Meanwhile, shoppers are looking for more physical stores to shop at as they are tired of the uncertainty that comes with online shopping. April saw a new round of crackdowns by the State Council on piracy and fake goods. The State Council has stated that any company caught pirating goods or making fake goods will be banned completely.
What Consumers Think
RedTech Advisors did a survey in 15 cities concerning fake goods and pirated items. They found:
91% of Chinese consumers are conserved with product authenticity
This is up from 78% that was seen last year. Showing that consumers are getting sick and tired of dealing with these issues.
The Hurdles Companies are Facing
In terms of online sellers, Alibaba is taking a huge hit when it comes to the crackdown on these illegitimate products. In fact, China called out Alibaba on allowing fakes and trademark infringement to happen. Since then, Alibaba has tried to lower the number of online stores that are doing this, but with the number of sellers using the Taobao marketplace, it is becoming an impossible task to ensure authenticity of Chinese brands.
Other online platforms like JD.com, is doing a much better job than Alibaba on ensuring these sellers are not present on their platform. The reason being is that they deal with more direct sales of products that are harder to duplicate such as Coach, Ray-Ban, Apple, and Reebok. Spokesman Josh Gartner stated, “I don’t think anyone can say that it never happens, but we are confident that we are ahead of the pack.”
The online retailer in Beijing, Jumei International, deals specifically with beauty products. And this is one field that is easy for sellers to duplicate and fake. Thus, the company knew they had to do something drastic. Mona Meng Gao, the Co-Chief Financial Officer stated:
“We have to go the extra mile with consumers…”
This was to ensure that online consumer were getting the real thing. Thus, they lowered their prices by 30%, and only sells products from established brands like L’Oreal or Max Factor. They also developed a label system that helps consumers to ensure they are getting legitimate products.
The push to ensure that online shopping in China is still something that consumers can count on for authentic products is a fight that will continue. However, the damage for many consumers has already been done, as they refuse to purchase online goods.