China has come down hard on its world-renowned counterfeit industry. Bazaars lined with fake watches, shoes and bags have been demolished in recent years. A new law effective Jan 1 promises to slap online retailers with up to 2mil yuan (RM1.21mil) in fines for bogus goods sold on their platforms.
But Chinese counterfeiters – still the most prolific in the world – have already reshaped their businesses by retreating to even more private spaces online. Many of the country’s best fakers are now hawking their wares via social messaging networks like Tencent Holdings Ltd’s WeChat. First they market their offerings at home and globally on platforms like Instagram or ByteDance Ltd’s Tik Tok. Buyers then order and pay through private messaging apps. Such transactions are arguably “friend-to-friend” and not e-commerce as defined by the new law.