Groups buy into scam
Global Times | December 06, 2011 00:38
By Liu Meng


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"I do not trust group-buying websites anymore," said Li Li, a graduate student in Dalian, Liaoning Province, who recently bought fake lipstick on a group-buying website.

The Japanese branded lipstick was about 60 percent off the original price on the website, which encouraged Li's purchase.

But now, Li told the Global Times, she would rather pay the full price for a real one than possibly be cheated again.

"I found the lipstick brand's English name is misspelled, and the cap does not fit the bottle," she said. "If there is any possibility I will shop this way in the future, it will be through trustworthy websites, such as taobao.com," she said.

Li may find herself frustrated again or even swearing to never visit group-buying websites if she knew that even well-known websites are also involved in counterfeit goods sandals.

Infamous websites

Ju.taobao.com (Juhuasuan), taobao.com's group-buying platform, was exposed recently for selling fake Casio wristwatches.

A total of 1,500 customers were scammed out of 898,500 yuan ($141,244) in the case, according to Yangcheng Evening News.

During the website's group-buying activity in mid-October, a style of Casio wristwatches sold for 599 yuan, compared to the original market price of 2,282 yuan on the website.

The supplier of these watches said it had passed the taobao.com authentication test. But more and more people have come forward claiming to have been scammed. Angry buyers could not help but launch an online campaign asking sellers to follow through with what they promised - triple compensation if the goods are found to be fake.

However, enforcing these rights has been harder than expected.

The taobao.com customer service staff insisted that compensation is available only when buyers can provide the inspection report from quality supervision departments, an inspection certificate issued by the original producer, and the certificate of fines and confiscation from the industrial and commercial authorities.

Buyers were informed that Casio would not provide individuals any inspection report without a judicial department order, the New Express reported.

"Sellers rely on the inaccessibility to these certificates to sell fakes at will," Wang Hui, one of the 1,500 victims, told the newspaper.

The continuous online protest of buyers drove Juhuasuan to release a notice on how it will punish shops providing fake watches, including triple compensation to customers and stripping the shops' group-buying qualification from Juhuasuan.

An anonymous customer service staff member at taobao.com told the Global Times that there are associates responsible for checking the quality of products for Juhuasuan.

"When the seller applies for group-buying qualification, they must provide us with the product's quality certificate," he said.

An insider told the New Express that although taobao.com does product qualification inspections, they are "loose."

Gaopeng.com, a group-buying website co-funded by US-based Groupon (founder of the group-buying industry) and Tencent, was also dragged into the fake product scandal.

On November 4, the Swiss watch company Tissot asked the Swatch Group branch in Shanghai to announce that Tissot wristwatches sold on gaopeng.com were found to be fake.

Just days before the announcement, customer service employees at gaopeng.com had made claims that all their products were real.

After the Tissot announcement, gaopeng.com corrected itself by declaring that this particular case was due to the supplier in Tianjin providing them with fake product certificates, and therefore gaopeng.com was also a victim.

Alamusi, vice director of the Policy and Law Committee of the China Electronic Commerce Association, told the Yangcheng Evening News that gaopeng.com should not be exempt from responsibility just because the supplier provided fake certificates.

"The website shares dividends if products are sold, which makes it equivalent to a seller, therefore, the website has an obligation to strictly inspect whether the products are genuine or not," he said.

Zhong Kaiwen, a lawyer at the Guangdong-based China Commercial Law Firm, also said that besides the fake product supplier, the website also has the civil liability for compensation.


Discount illusion

Li Li told the Global Times that just like most group-buying fans, it was the striking discounts on the website that attracted her.

"Many luxury brands, such as Gucci, cut prices by more than 1,000 yuan on some group-buying websites," she said.

The Global Times found that on xiutuan.com, the group-buy price of a Louis Vuitton wallet is 5,269 yuan, while the original price on the website is 6,050 yuan. For a Fuji camera on the same website, the two prices are respectively 459 yuan and 899 yuan.

However, the Global Times also found on tmall.com that the original price of the same Louis Vuitton wallet is only 4,997 yuan, and the same Fuji camera on 360buy.com is originally priced at 499 yuan.

Qiu Jianguo, director of the China Consumers' Association complaints department, told the China Business Journal that group-buying websites have developed quickly over the past year. According to some local consumer associations, complaints are also increasing, including those about artificially high prices, poor quality and fake products.

A customer service employee at xiutuan.com told the Global Times that they imported the luxury goods and independently decide the original product price on their website according to the market.

Guan Peng, vice manager of the Yanhuang Internet company and an Internet expert, told the Global Times that though group-buying websites develop quickly in the country, supervision on them is lagging.

"Cracking down on counterfeit goods requires action from large numbers of customers," he said.

"Considering the relatively large number of customers involved in group-buys, it is easier for them to form a powerful collective to complain than if they were to make regular online purchases."

"The punishment of websites and online shops that are involved in selling counterfeit goods should also be more severe," Guan added.

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