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Fake domain

By Chen Tian Source:Global Times Published: 2013-10-21 21:53:01

If a trendy young woman in China wants to get one of Chanel's classic black leather bags, she no longer needs to visit a department store, browse an online shopping site, or ask a friend to buy her one from overseas.

Now it's possible to get an extremely close replica of the luxury item via WeChat, an instant messaging app that has more than 500 million users in the Chinese mainland and over 100 million users overseas.

WeChat, a free-of-charge smartphone app provided by Internet services giant Tencent Holdings, allows its users to exchange text, picture and voice messages and to share status updates with their friends.

However, the popular social tool has also become the home of hundreds of fake luxury brand dealers, who sell counterfeit items ranging from Chanel and Prada handbags to Rolex and Omega watches.

The central government has cracked down in recent years on several brick-and-mortar marketplaces selling fake products, such as the infamous Silk Street market in Beijing. It has also shut down stores selling counterfeit goods on online shopping sites such as Taobao, owned by e-commerce giant Alibaba Group, one of Tencent's biggest rivals.

Fan Zhiming, a top executive at Alibaba, condemned WeChat at a Wednesday press briefing, saying that the app has become a "base camp" for buying and selling fake products, news portal ifeng.com reported.

However, although counterfeit vendors have become rampant on WeChat, they face relatively little scrutiny from the authorities, legal experts said.

Keep it private

Unlike public Taobao stores and brick-and-mortar shops, fake product vendors on WeChat keep their communications with customers private.

A seller who called herself Vivian Zhou told the Global Times Sunday that she does not own a Taobao shop or any other "public stores" and only has one-to-one conversations with customers.

Zhou, who is based in Guangzhou, capital of South China's Guangdong Province, sells replicas of Chanel, Dior and Gucci handbags. She usually receives WeChat messages from customers asking about specific purses, and then replies with a price and a brief description touting the high quality of her product. 

Zhou sells a black Chanel Reissue leather handbag with gold chains - which is priced at $185 (1127.50 yuan) in the brand's official online store - for 680 yuan ($111.53).

"We manufacture the Chanel Reissue bags in our own factory," she told the Global Times. "We make the bags using imported sheepskin and the best metal."

Zhou refused to reveal how much profit she makes, but said her rivals sell similar replicas for more than 800 yuan.

A representative for another fake product vendor, with the account name of "Angel Replicas of Luxury Goods," told the Global Times Thursday that the store sells its counterfeits "all around China and even overseas."

Angel Replica is also based in Guangzhou and sells designer items such as a pink Prada Tamaris purse - normally priced at $1,870 - for 1,880 yuan. The shop also receives orders for specific handbags, which take the factory a week to make, the representative said.

Both Zhou and Angel Replicas require buyers to pay up front before they ship the goods, while regulated shopping sites, such as taobao.com, require sellers to ship the products before the buyers pay.

Easy money

Mo Daiqing, an online retail analyst with the China E-commerce Research Center, told the Global Times Thursday that many counterfeit sellers are turning to WeChat partly because it is easier and cheaper to market and sell goods on that platform.

"Sellers can post ads free-of-charge and buyers can see the entries as soon as they are published," Mo said. "WeChat allows quick, cheap, targeted and thus highly efficient marketing."

Angel Replica, for example, posts advertisements of its replicas of Prada, Céline and Gucci handbags, and communicates with buyers in the comment section under the postings.

The sellers also use the "Look Around" function on WeChat, which allows them to spot random WeChat users who are geographically close to them and to greet the users before adding them as friends. This means that sellers can proactively look for a potential buyer and then send them messages containing advertisements.

A seller surnamed Chen, who was cited in a Wenzhou Commercial Daily report published in June, said that she makes more than 5,000 yuan a month from selling fake luxury products on WeChat.

Chen, a full-time employee at a trade company, said she sends customers' orders to the counterfeit maker, which ships the products directly to the buyers. Chen collects money from the buyers and then transfers part of it to the factory, the newspaper reported.

"There is no inventory or marketing cost, and you can do it part time," Chen said. "Of course more and more people are joining this business."

Difficult to regulate

While regular companies and shops register for public accounts on WeChat and send advertisements to their subscribers, fake product sellers use private accounts to market their goods to random potential buyers and keep their communications private.

This adds to the difficulty of regulating the market, said Qian Shaohua, an intellectual property protection lawyer in the Beijing office of Jin & Partners.

"The government has to review WeChat users' postings and their conversations to find if they are selling fake luxury products, but it cannot do so under regular circumstances because that invades the users' privacy," Qian told the Global Times Thursday.

Qian said that Tencent Holdings should, but is not obliged to, prevent WeChat users from selling fake products.

In an e-mail sent to the Global Times Thursday, Tencent said that WeChat is a social rather than an e-commerce app, and it does not encourage any users to sell goods on the platform.

"Tencent welcomes its users to file a report if they have found that someone is conducting illegal activities such as selling fake and low-quality goods on WeChat. After investigating the case, we will punish the account owners who have violated rules and regulations accordingly," the company said in the e-mail.

The most effective way to root out counterfeit goods on WeChat would be for the brand owners such as Chanel and Gucci to cooperate with China's authorities to launch a crackdown, Qian said.

Taobao and French luxury brand Louis Vuitton signed a memorandum of understanding in Paris on October 11 to combine efforts in cracking down on counterfeit goods. Chanel S.A. and Tiffany & Co filed lawsuits in 2011 against Chinese websites for selling replicas of their products.

Luxury brand owners including Chanel and Prada Group could not be reached by the Global Times as of press time.

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