WeChat Being Used by Counterfeiters to Build up their Fraud Chain

Cashing in on the price difference between luxury goods sold in China and overseas, Daigou (代购) – aka. overseas purchasing agents – have long bought goods on behalf of consumers in China. But, as the Chinese government puts in place new measures to boost domestic spending, many luxury brands have lowered their prices in China, bringing them in line with global price points. Consequently, the role of a middleman like Daigou has been threatened, and a career as an overseas buyer has become increasingly unsustainable.
Now, the overseas purchasing business is evolving in a different, darker direction, coined “Daigou 2.0″. Targeting consumers who are looking for luxury goods at a steal, counterfeiters from China are now providing fake goods under the guise of authentic Daigou vendors.


According to an investigative report by the Chinese state media People’s Daily on August 7, which was trending on China’s social media platform Weibo, luxury goods counterfeiters employ a variety of techniques to disguise the true origin of their products, such as paying insiders for production batch codes to reprint onto packaging, giving consumers the illusion they will be able to verify the authenticity of the item
Another common trick, according to the People’s Daily report, is known as ‘gold plating (镀金)’, referring to a practice of shipping the counterfeits abroad first to obtain overseas shipping documents and entry certificates, in an attempt to prove the product has been bought overseas.
Earlier this year, Jiangsu policemen seized more than 80,000 pieces of counterfeit luxury makeup from WeChat vendors in the city of Suzhou, who had been creating products imitating brands like Dior, MAC and Fresh. The total worth of these products was more than 1.5 million USD (approx. 10 million RMB), according to the local police.
In Jiangsu’s case, the main suspect confessed to purchasing barrels of cheap fragrance from Guangdong province, bringing the manufacturing costs to only 15 cents (1 RMB) per 50 ml bottle of counterfeit perfume. These fake products are then labeled with luxury brands, and sold at upwards of 30USD (200RMB) per bottle, leaving room for a huge profit margin.
The presence of trusted Daigou agents in this process can add a layer of credibility to the counterfeiters. In turn, the high profitability offered from selling fake luxury goods has motivated many traditional Daigou agents to participate in this illegal business. In recent years, the livelihood of Daigou agents has been adversely affected, as the Chinese government implements measures such as lower import tariffs on luxury goods, encouraging international brands to lower their China prices.

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An overseas Chinese student, Li, who admits to helping to sell fake luxury goods on WeChat, told Jing Daily, “the profitability now is attractive, and it’s hard to recognize the difference between counterfeit and real goods.”
She continued, “we don’t handle the manufacturing process of any product, but deliver them to clients. We then keep a certain percentage of the profits from every client we bring in.”
The intimate nature of WeChat as a one-on-one private messaging tool now serves as a shortcut for counterfeiters to strike deals.
“There is a huge loophole in the current law enforcement for the punishment of WeChat vendors” commented one Weibo user. “Wait, I think I might have bought a counterfeit product,” said another, demonstrating the widespread distrust shoppers now have for buying luxury goods via WeChat.
Both luxury cosmetic brands and WeChat itself are taking actions to prevent counterfeiting. Many high-end cosmetic brands like Estée Lauder, SK-II, La Mer, and Sulwhasoo now offer to recycle their customers’ empty skincare bottles for small rewards, leaving less room for Daigou to collect empty packaging. WeChat also claims to have punished more than 72,000 vendors selling counterfeit goods and shut down 875 counterfeit-related mini-programs.
Tencent did not immediately respond to a request for comment.

$70M of fake Nike Air Jordans seized in Newark from China

They looked like thousands of generic shoes without any logos or labels.
But that was just the start of the ruse.
Federal authorities on Tuesday arrested five individuals charged in a scheme to import more than $70 million in counterfeit Nike Air Jordans through Port Newark from China.
The sneakers were manufactured to resemble various editions of Jordans, which typically retail for $190, but without any identifying markings so they would not be flagged by customs officials, authorities said. Fake logos were allegedly added to the shoes after they came through the port, and then the footwear was sold to people throughout the U.S.

Real Air Jordans. (Nike)

The five -- Miyuki Suen, Jian Min Huang and Kin Lui Chen, all of New York, and Songhua Qu and Fangrang Qu of Hicksville, N.Y. -- are accused of importing at least 42 shipping containers between 2016 and 2018, bringing in an estimated more than 380,000 pairs of sneakers. If convicted, they face up to 20 years in prison.
It is not an uncommon scam, officials say.
U.S. Customs and Border Protection last year seized $1 billion in counterfeit goods, and inspectors say they frequently come across shoes, handbags and other consumer goods that appear generic because there are no identifying brand names affixed to them. Those logos and names are then added after the items pass through customs, they said.
In one case, a shipment of Timberland boots had an insert glued over the logo on the bottom of the boot. An inspector discovered the ruse with a flick of a knife on the heel-side of the shoe.

By Ted Sherman

tsherman@njadvancemedia.com

NJ Advance Media for NJ.com

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Baton Rouge Store Arest Made - $1 Million in Counterfeit Items Seized from

Bocar Ba, 43, was arrested and charged with illegal use of counterfeit trademark in connection with the sale and distribution of counterfeit goods.
"It runs the spectrum from counterfeit Nike shoes, Louis Vuitton, Prada, Coach merchandise, clothing, pursues, shoes," said Bryan Cox Public Affairs Officer with the US Immigration and Customs Enforcement.

Box after box was carried out of Fashion Express on Airline Highway as investigators took evidence they say was counterfeit merchandise worth more than $1 million.
Agents made one arrest during the raid and seized 3,082 pieces of fake designer shoes and purses.
Fashion Express is located at 5956 Airline Hwy.

The bust is a result of an ongoing joint investigation between US Immigration Customs Enforcement and the state's Attorney General's Office.
Bryan Cox said nationwide, businesses lose up to $2 billion each year to counterfeit vendors. He says every dollar made by a counterfeiter, is a dollar taken from businesses playing by the rules.
"Those are businesses that pay taxes, employ workers, contribute to the economy," said Cox
Cox says counterfeit items are usually brought in from overseas.

"If you know what a legitimate Michael Kors bag is, you can feel the material and see the quality of construction; just is not what a legitimate item would be. Not the same material, not the same weight the leather is of lower quality," he said
There are trained investigators who know the difference between illegal and real merchandise. He says those who counterfeit and are caught can face criminal and civil charges.
"It's illegal, it's a problem and it's something that we're looking for and we are going to find you."