The rampant spread of counterfeit goods on the internet is an undeniable fact. Industry estimates suggest that fake products make up between 30% to 50% of online sales. For instance, Amway once commissioned a globally renowned third-party testing and certification agency to conduct a sampling purchase and inspection of 49 online stores on a well-known large-scale online shopping site in China. The results showed that 46% of the sampled products were counterfeit. Overall, C2C websites have seen counterfeit transactions account for about 70% of their total transactions at one point. Even with some sites introducing a large number of branded goods recently, the proportion of counterfeit goods still exceeds one-third.
Third strategy: Smart code marks, severely punish dealers who sell unauthorized goods.
Third type: Boldly engage in unauthorized sales, profit from low-price bulk sales.
A friend purchased a 276 yuan Erdos mulberry silk T-shirt from a store named Pinzhiyuan Menswear with five-diamond credit rating. Before buying the T-shirt, to avoid being deceived, he carefully checked the reviews by netizens on the products of this online store. He found that the T-shirt he was interested in had many sales and glowing reviews. Although there were some negative reviews, they were only occasional. After reading the comments, my friend also carefully asked if the product was genuine. The seller assured him it was authentic, and would be replaced if proven otherwise.
Last year during the Spring Festival holiday in his hometown in Anhui, a friend enjoyed drinking Gujing Tribute Liquor. So, he searched for it on Taobao. Surprisingly, he found that there were very few shops selling Gujing Tribute Liquor on Taobao, and almost all were from the same shop, which was the official flagship store of Gujing Tribute Liquor on Taobao Mall. The shop owner said that this was the only store online selling Gujing Tribute Liquor, guaranteeing original packaging and authenticity with anti-counterfeiting labels that could be queried. Because Gujing has a logistics system to prevent unauthorized sales, their online sales prices are uniformly set by the manufacturer. Local offices directly deliver the goods. Upon receiving the delivery, my friend indeed saw the anti-counterfeiting logistics label. Logging onto the official website of Gujing Tribute Liquor, he found an anti-counterfeiting query window provided by a selected technology company, quickly verifying that the liquor he bought was genuine. This online shopping experience made him feel that manufacturers like Gujing Tribute Liquor should not suffer from counterfeit or unauthorized goods due to their excellent management, allowing consumers to truly buy with satisfaction.
This situation left me in a dilemma; I couldn't possibly invite after-sales service from Beijing to provide door-to-door service. Later, upon searching online, I discovered on Tencent News that issues between Skyworth and JD.com had already been widely discussed. On December 10th, a branch manager of Skyworth's China Marketing Center revealed: "JD.com's low-price strategy has already put pressure on traditional channels, and our branches across the country are increasingly feeling the strain. This situation needs to be resolved." From their perspective, numerous low-price orders handled directly by JD.com from Beijing and Shanghai branches were taking away their business. When JD.com sells low-priced products online, such as when Guangzhou consumers place orders, Beijing and Shanghai directly ship the goods to Guangzhou, which is essentially equivalent to transferring goods from Beijing to Guangzhou without authorization.
"Regarding unauthorized sales through traditional channels, we can monitor and manage them through after-sales installation services," Dong Qiang said. However, for online channels, there is no perfect monitoring system yet. He believed, "There needs to be higher-level cooperation between manufacturers and online channels, through formulating detailed regulations, to resolve issues such as whose sales performance it belongs to and how after-sales services are allocated."
At the end of the year, major online malls launch a series of discount promotions. Taobao, JD.com, flash sales, group buying bombard customers every 24 hours. Online shopping is already affordable, combined with mall sellers' powerful discounts like "Year-end clearance sale at 20% off", "Last day, sell out before going home for the New Year", "Let the special price fly a bit", these highly motivating low-price activities cannot fail to attract buyers. Moonbasa Dreambasha!
Summarizing years of online shopping experience, offering solutions for counterfeit and unauthorized goods problems.
First type: Manufacturer direct sales, prices lower than factory prices.
Second type: Bold-faced lies, refusing to admit under any circumstances.
Through the sellers' statements, we can roughly categorize the reasons for cheap online sales into two types: counterfeits and unauthorized sales. Counterfeit products are naturally the most frustrating for buyers unless you knowingly buy fakes just for the cheaper price, in which case it's a different matter. Otherwise, most buyers still hope to buy genuine products.
Unauthorized online sales not only create after-sales service issues but may also lead to other consequences. Last year, I helped a friend renovate his house. To save money, he bought many decoration materials on Taobao. After the renovation workers applied the paint, they found patches on the walls resembling tofu residue. My friend was angry, blaming the workers for poor craftsmanship, but the workers said they had never encountered such a situation in over ten years. Picking up the Hu Run paint bought online, they noticed the formula was incorrect. The workers said that the wrong formula should not be used in the south. Later, upon checking online, they learned that paint formulas differ according to regions. My friend could only accept his misfortune.
For BYD to increase sales volume solely by expanding its network is difficult. For example, in Shenzhen, A1 network has five stores. If you want to expand it to ten stores, existing distributors will definitely oppose it. BYD's approach is to modify the F3, making visible parts different while keeping invisible parts the same, turning it into G3 or L3, and selling it through A2 or A3 networks. This way, we can easily expand our network because the car models are different, and everyone can live in peace. Thus, BYD's number of stores easily expanded from 200 to 1000. Of course, the basic premise here is that merchants must have sufficient development capabilities. If they lack sufficient development capabilities, then they must choose the third category method.
Perhaps dear friends might think that unauthorized sellers aren't precisely letting us buyers get bargains? Because we can buy genuine goods and save a lot of money. In fact, unauthorized goods do not necessarily benefit buyers.
Editor's comment: The prevalence of counterfeit goods and unauthorized sales on the internet is an inevitable result of the development of the internet to a certain extent. However, in the long run, manufacturers urgently need to comprehensively improve their anti-counterfeiting and anti-unauthorized sales levels. By adopting scientific and reasonable anti-counterfeiting and anti-unauthorized sales technologies based on product and market conditions, they can keep pace with the times and avoid being eliminated by society. We look forward to more and better Chinese brands entering the online channel, enabling consumers to buy convenience and affordability through promotions and cost reductions.
Through Baidu, we find that the selected company's website explains the meaning of "unauthorized sales": There has always been a price difference between regions in the Chinese market. This price difference not only exists between different cities but even within the same city, between urban and suburban areas. Some dealers use cross-regional supply methods to exploit price differences for profit. This is what is referred to as unauthorized sales. Manufacturers generally send market inspectors to patrol various places, punishing unauthorized cross-regional sales heavily. However, when unauthorized sales meet online malls, it becomes more complicated, henceforth labeled as "online unauthorized sales," leaving manufacturers worried.
Let us first examine several claims made by sellers:
Second strategy: Selling different types of products online and offline to prevent unauthorized low-price sales.
Experienced online shoppers know that so-called discount promotions are mostly still cases where the seller ultimately profits, and sellers will not do unprofitable business. But why can sellers sell so cheaply online?
For example, I previously bought a 42-inch Skyworth LCD TV on JD.com for 3799 yuan. It could be delivered to my home, but the same model sold at Gome for nearly 6000 yuan. Although I got a bargain, after bringing it home, I found the picture quality was quite ordinary. The USB port often malfunctioned, requiring me to unplug the power cord. When I contacted Skyworth customer service personnel to come check it, they looked at the invoice and said they were responsible only for televisions purchased in Panyu region since my television was shipped from Beijing via JD.com Mall and thus not within their after-sales service scope.
In summary, as buyers, we hope to shop through online channels for convenience, affordability, and genuine products. Buying counterfeit or unauthorized goods always leaves us uneasy, either because the product itself has issues or the seller tampers with the packaging, making the items seem like defective goods.
Online counterfeit goods are now a reality, and unauthorized online sales harm both manufacturers and consumers.
Similar conflicts between JD.com and Skyworth are widespread, especially for electronic products like mobile phones, microwaves, and induction cookers. Consumers often view physical samples in appliance supermarkets or specialty stores and then search for the same model online to purchase, significantly impacting the sales of traditional channels. They may abandon sales or shift to online platforms, eventually disrupting the manufacturer's pricing system, leading to sluggish market sales and damaged interests. Here, manufacturers can learn from BYD Automobile's approach:
Thus, my friend paid the money confidently. However, upon receiving the clothes, he felt the quality wasn't good, and upon logging onto the Erdos website to query the customer service phone number, he surprisingly found a red headline on the homepage of Erdos's website stating: "Legal Notice Regarding Online Sales of 'Erdos' Brand Series Clothing Products." The statement clearly expressed that Erdos Group had not authorized any institution, unit, or individual to sell 'Erdos', 'ERDOS', 'Erdos Aoqun', 'Muxingrong' brand clothing online. Subsequently, calling Erdos's customer service confirmed the worst - the product he bought was definitely not genuine. According to the customer service staff, Erdos trademarks have anti-counterfeiting watermarks embedded with a metallic strip similar to banknotes. The trademark on the received clothes had a metallic-like thing but was gold-embossed instead of embedded.
"E-Mei Shopping," a 2-crown merchant, sells Juyoung soy milk machines 311 yuan cheaper than Carrefour. Looking at the product page introduction and physical photos, everything seemed normal. Curious, I asked the seller, "Why is your soy milk machine so cheap?" Seller xdgwin replied, "Dear, our soy milk machines are directly taken from the manufacturer, so they are sold at the factory direct price." This claim is hard to verify, and you have to believe it. After purchasing, the appearance looked no different from the ones displayed downstairs at Carrefour, so I paid happily. A week later, I noticed the noise was particularly loud, and the beans weren't ground finely enough. Checking at a designated Juyoung repair point, the master said it was a counterfeit. Upon disassembly, the circuit board inside was different. Genuine products have green and thick circuit boards, whereas the one I bought had yellow, thin, copper-green circuit boards. Collecting information online, I found many others who bought counterfeit Juyoung soy milk machines online. Later, contacting Juyoung's anti-counterfeiting office, Miss Hu said the company has only three production bases: Jinan, Shandong; Hangzhou, Zhejiang; and Suzhou, Jiangsu. Among them, the Suzhou production base does not produce soy milk machines, so only those produced in Jinan and Hangzhou are genuine. Additionally, the company has never entrusted or authorized other companies to produce, and products marked as coming from Foshan, Zhongshan, Shenzhen, Hong Kong, Shanghai, and Zhuhai, despite bearing the "Juyoung" mark, are all infringing products.
Having such experiences, I became very experienced in online shopping and developed several strategies to help fellow buyers and manufacturers:
"Online unauthorized sales" are typically actions by internal dealers, meaning that no matter what mark the manufacturer uses, the dealers will know where it is. The location of the mark is no longer a secret to dealers. Therefore, only when the logistics code mark is sophisticated enough to be recognizable yet indestructible does it count as advanced. The most thorough solution in the anti-unauthorized sales field —— the smart code technology independently researched and developed by Zhongxuan Technology —— generates irregular dot matrix codes corresponding to product identity information through an intelligent compilation system, including product type information, production information, serial numbers, sales information, etc. These cannot be identified by the naked eye and follow no discernible pattern, making them resistant to destruction. Intentional unauthorized sellers will find it not as simple as removing a chip to destroy these marks because the code is unseen and intangible, integrated with the product design. Henceforth, unauthorized sellers on the web will be wary because as soon as a merchant buys a product online, they can trace which dealer supplied the goods.
Last year, a friend selling Mary Kay cosmetics recommended using No. 1 lotion, which I purchased for 135 yuan. After using it and finding it satisfactory, I went online to look for it. I discovered Qingfeng Cosmetics Store was the hottest Mary Kay seller on Taobao, having sold over 5,000 bottles, always ranking first in Taobao searches. Most strikingly, their title read, "Nationwide Craze! Anti-counterfeit Mary Kay Basic Moisturizing Cream 1 No. Lotion Remove Chip," drawing my attention. Chatting with the seller, I learned they were originally senior beauty consultants for Mary Kay but found door-to-door sales too exhausting, so they opted for online sales with thin margins but greater overall profits. However, the manufacturer installed RFID electronic chips in the products, so to avoid detection, they had to pry open the bottle caps and remove the chips before selling. This made me trust their products even more. After purchasing and trying it, the product was indeed identical to the one I bought for 135 yuan. However, the bottle cap was noticeably damaged.
First strategy: Identify anti-counterfeiting and anti-unauthorized sales labels, benefiting both consumers and manufacturers.
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Taobao's transaction volume reached nearly 13 million RMB.