40% Products Sold Online In China Are Fake; Alibaba Alone Sold $45B Of Counterfeit Products In 2014!

China’s state-run news agency Xinhua published a report on implementation of “Law on the Protection of the Rights and Interests of Consumers”; and there is some alarming revelations in that report.

It has been found that more than 41.3% of all goods sold in China via online medium are fake and counterfeit. Alibaba, which is China’s biggest ecommerce portal, sold $45 billion of fake products last year. They grossed $112 billion worth of Gross Merchandise Value last year.

As of now, there are 361 million Chinese who bought products online last year, which is 55.7% of overall shoppers in the country.

China Is World’s Largest Online Retail Market – But Is It Worth It?

As per the report, China has now overtaken USA to become world’s largest online retail market. Between 2014 and 2015, total of $442 billion (2.8 trillion yuan) worth of online transactions happened in China, compared to $300 billion in US. For China, this is an increase of 40% year on year.

As per China Internet Network Information Centre (CNNIC), ecommerce in China accounted for 7% of their GDP in 2014, which is almost equal to USA and higher than other country in the world.

But negating this tremendous growth in ecommerce are the massive complaints received by Chinese Govt. regarding fake and counterfeit products sold online. The report says that complaints regarding such online fake products increased by 356.6% last year, as total of 77,800 angry complaints were received by them.

Paytm & Alibaba’s Expansion Plans Can Take A Beating

In May this year, luxury brands from USA sued Alibaba when it was found that some sellers are offering fake Gucci bags for as low as $2. A standard Gucci bag retails for $795 in USA.

Such is the negativity associated with Chinese fake products that US has banned Taobao, another huge market place in China, from selling any products in their country. In fact, just before their IPO earlier this year, Alibaba removed 90 million fake listings from their platform.

This new revelations about fake Chinese products can severely dent Paytm and Alibaba’s expansion plans in India.

Yesterday, we had reported that Paytm is investing close to Rs 5000 crore to increase buyers on their platform. But the issue is, they are relying on Chinese sellers to intensify traction on their platform. They are going to list around 1 lakh Chinese sellers from Alibaba and encourage trade between India and China. If we go by the fake products report, then India will be soon flooded by fake Chinese products and sold openly on platforms like Alibaba and Paytm.

It is high time that India should also have a strict policy and process to check the inflow of fake products from China; and help consumers not to get cheated.

Have you ever experienced a fake Chinese product? Do let us know by commenting right here!