Major Chinese luxury e-commerce site accused of selling counterfeited products

Jing Daily reports that the Chinese luxury shopping website XIU.COM is dealing with a scandal as customers have accused the e-tailer of selling counterfeit luxury goods. According to a report by Xinhua news agency, in the wake of multiple accusations that the e-tailer knowingly stocked luxury fakes by brands like Gucci, chief strategy officer Huang Jing defended his company this week, stating, “Mistakes only happened when our employees were overwhelmed by a large number of orders. We stand behind our suppliers and authentication procedures.”

Jing Daily reports that this isn’t the first time that Chinese e-tailers have come under scrutiny with their ‘fakes’. It is an area that will need to be cleaned up with China’s e-commerce market booming. Consumers spent an estimated $US1.27 billion on “Singles’  Day” (November 11) alone when it came to online shopping.

According to a former employee interviewed by Xinhua, the counterfeit accusations boil down to a dearth of qualified authenticity appraisers and lax item examination procedures at the company. This isn’t unique to, Xinhua points out, as many domestic Chinese e-tailers source products from the local grey market rather than directly from brands, and the most trustworthy suppliers are often buyers residing overseas. As the former Xiu employee put it, “Employees often can’t even recognise the brands themselves, nevermind examine the products for authenticity.”

Zhou Ting, dean of the Fortune Character Institute, holds that’s counterfeit scandal illustrates one of the hurdles China’s high-end e-commerce market must pass if it will compete with international players. Said Zhou,  ”Only a few companies provide appraisal services in China, and those that do only focus on [second-hand luxury] consignments.” One example of this is Secoo, China’s largest online consignment e-tailer, which provides a respected 16-point authentication service. However, this doesn’t help luxury online retailers dealing in new goods.