China is taking steps to curb its counterfeit industry. The new e-commerce law makes platforms jointly responsible with sellers of fake goods. But Chinese counterfeiters have not given up. Instead, they have found new ways to sell their fake goods.
The counterfeit business is gradually moving to more private spaces online. First, counterfeiters offer their illicit goods on social media platforms, for example by sharing links to product pages. Then, they connect and take orders and payments through private messaging apps such as WeChat.
What is WeChat
The significance of WeChat in China is enhanced due to the fact that many websites and apps are still blocked in China, such as WhatsApp, Instagram, Facebook, Google, YouTube, and many others. As a result, Chinese consumers use mainly Chinese websites and apps.
WeChat is a Chinese instant messaging, social media, and mobile payment app that has over 1 billion monthly active users in China. It is now also available to users outside the country. Being a social media platform with a payment function, it attracts business transactions on the app.
Fakes on WeChat
Sellers of fake goods, often luxury goods such as bags, watches, and clothes, are active on WeChat. Sometimes sellers of fake goods lead consumers to believe they are buying the genuine product. Other times, WeChat sellers offer clearly unbranded goods that are fake.
As foreign brands are learning how to utilize WeChat, counterfeiters have already seized the opportunity and are selling on the WeChat platform without the knowledge of the legitimate IP rights holders.
WeChat and Brand Protection Challenges
WeChat is not an e-commerce platform. Still, the issue of counterfeits was substantial enough that in 2015 WeChat had launched its Brand Protection Program. Both foreign and domestic trademarks and businesses are welcome to register, as international brands are part of WeChat’s expansion.
In its 2018 report of Brand Owner Protection, WeChat announced that it had punished 72,000 accounts in 2017 for selling counterfeit goods. WeChat has also made improvements to better its brand protection. For example, it had standardized the online infringement complaint system. According to the report, most infringing accounts have tried to sell counterfeit goods by promoting the legitimacy of the source of goods, deceiving potential buyers with the keywords, “high quality imitation”, “factory overrun”, and “A-level goods”.
Although WeChat is making efforts to work with brand owners, taking down counterfeiters is a challenge for the app. As mentioned earlier, illegal sellers offer fake goods on WeChat, often with links to product pages. They also share their “WeChat IDs” on other social media platforms, such as photo-sharing sites. Then, they can become friends on WeChat, and send information about their merchandise directly to potential buyers. The transactions themselves are also done via the WeChat app. This doesn’t only make it difficult to take down, but also enables the seller to continue to offer goods to the buyer while being almost impossible to track.
Many sellers utilizing WeChat are daigou – Chinese cross-border purchasing agents. Daigou purchase goods, mainly luxury goods, for customers in China and profit from the price difference between the goods in China and abroad. Daigou has become very popular for customers who look to acquire genuine foreign products. They usually present themselves as overseas students or flight attendants who can purchase goods abroad and bring them into China to sell.
In recent years, new measures implemented by the Chinese government have encouraged luxury brands to lower their prices in China to match their global pricing. In addition, the new e-commerce law from 2019 affects daigou as it attempts to regulate the industry. Now that their business is unsustainable, some daigou pretend to continue their authentic overseas purchases, while in fact turning to selling counterfeit goods made in China. They may even send them abroad so they can send them back into China, this time with the relevant shipping documents. This keeps the daigou agents in business, adding credibility to the counterfeiters.
Online Brand Protection
Both luxury goods manufacturers and WeChat are working to curb counterfeiting. However, the private messaging on WeChat makes it a great tool to finalize deals that are almost impossible to trace.
It is not easy to submit a valid complaint to WeChat, accompanied by the required evidence. A major obstacle is that many sellers’ identities are uncertified.
To protect their brands, right holders should monitor this social platform. Facing significant challenges in monitoring WeChat, brand owners can use a system such as Wiser Market’s algorithm that scans and analyzes online channels 24/7. Together with Wiser Market’s dedicated team, we protect brands online wherever protection is needed.
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