Four of 10 products sold online in China are fakes, shoddy

By Money Times

Nov 05, 2015 01:10 AM EST

More than 40% of goods sold on the Internet in China are fakes or shoddy, according to a report by an official of the standing committee of the National People's Congress, the country's top law-making body.

The report delivered to lawmakers was published by state-run Xinhua news agency. It says there were 77,800 complaints related to online orders last year. That's 3.6 times higher than the number recorded a year ago.

The report is based upon a survey conducted by China's top business regulator, the State Administration for Industry and Commerce, between August and October last year. 

But news outlet Quartz says the SAIC inspected only 92 products, covering six categories including smartphones, toys, auto parts, clothing, makeups, and fertilizers.

No explanation was given as to why the regulator chose those six categories. It did say however that items inspected were high-profile or foreign brands.

The SAIC report was released last January. After that, an open letter came out on the Sina Weibo account of Taobao, Alibaba's biggest shopping site.

The letter, attributed to an anonymous employee, blasted SAIC chief Liu Hongliang for "crossing the line." "It's easy to ruin [the reputation of] Taobao, but please don't ruin the spirit of private entrepreneurs simply because [you are angry with] Taobao."

The latest report from the standing committee deals a big blow to the credibility of Alibaba, which has been lobbying the United States to be kept off its fake goods blacklist.

Founder Jack Ma says they have been looking into suppliers, noting even the company has fallen victim to the fake goods trade.

Alibaba is among four Chinese firms on the list of top 10 world Internet companies, an indication of the rapid growth of the country's e-commerce industry.

More than half of Chinese shoppers turned to the Internet last year to look up products, resulting in a 40% increase in online sales. Transactions online amounted to 2.8 trillion yuan ($442 billion), making China the world's biggest e-commerce market.

With Chinese online stores growing in popularity, the standing committee report called for "accelerated legislation in e-commerce, improved supervision and clarification of consumers' rights and sellers' responsibilities."

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