Influencers Get Paid to Advertise Fake Creators from China

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Luisa Matsakis

Eben Fox makes it the world’s most productive food shopping hack. In a since-deleted TikTok video, the sneaker influencer told his 120,000 followers about a hard-to-understand e-commerce site called Pandabuy.

“It’s all so reasonable that you immediately get hooked,” said Fox, nicknamed Cedaz. “Imagine if each and every one of the shoes or items of clothing that you’ll never get because they’re so expensive can now be had for $20 to $50. “There’s just one problem: almost every article looks fake.

A wave of social media influencers are making money selling illegal fakes imported from China on Facebook, TikTok, Discord, and Reddit. Pandabuy alone claims to have enrolled thousands of content creators in its marketing program last year. They are the public face of an elaborate new counterfeiting economy that is difficult for tech platforms to combat and that makes Canal Street dealers in Manhattan look downright primitive. It works by connecting Western shoppers with Pandabuy and other fast-growing Chinese sites that serve as intermediaries between ad marketplaces filled with fakes. In exchange for selling the platforms, influencers earn a percentage of each sale.

In December, Nike sued Fox, accusing it of collaborating with Pandabuy to market counterfeit versions of its shoes. His attorney, Joe Southern, said Fox disagrees with the allegations but is investigating the case. WIRED’s questions to Pandabuy were directed to a visitor service agent known only as Yaya, who said the company did not have the expertise to authenticate the products it lists.

“I mean any logo, any designer logo that you like and think their products are too expensive, so buy them here,” says an influencer who stores Pandapurchase links in a TikTok video. “The leather is so good. ” It feels real,” the designer tells the camera, holding a fake black Yves Saint Laurent bag.

Influencers who work with Pandabuy and similar sites sell everything from fake Chanel badminton outfits and Skims dresses to counterfeit Stanley cups, and share links to e-commerce site listings to track orders and pay them a commission. WIRED studied how the ecosystem works by searching retailer websites, documents shared on personal Discord servers, and publicly accessible videos and spreadsheets online. Some influencers in the industry are selling pirated copies of self-help books, such as Morgan Housel’s The Psychology of Money. One of them arrived here, invented a fake “vintage” Chanel bag on which there were water stains to make the bag look older. Fox has even touted counterfeit Ferrari car keys, suggesting in a TikTok video that they could be used just to impress someone for the first time. date.

TikTok’s advertising regulations and network rules prohibit the promotion of fakes. The company claims to have suspended the accounts of several influencers after WIRED brought them to their attention. “We continually enforce strict regulations against counterfeit products, invest heavily in detection and reporting, and supply an IP coverage hub for brands,” TikTok spokesperson Mahsau Cullinane said in a statement.

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Daniel Shapiro, senior vice president of strategic partnerships at Red Points, a company that helps brands find counterfeits of their products online, says that now almost any item can be temporarily copied and that small businesses are increasingly seeing their creations being scammed. The ones he is referring to are not “duplicates,” a term used to refer to products that only resemble other products and carry their own branding, but rather painstakingly crafted clones, called “replicas,” that take advantage of the trademarks and intellectual properties of other companies. .

Overall, counterfeit and pirated products account for about 2. 5% of the global industry annually, according to a study co-authored by the European Union Intellectual Property Office and the Organization for Economic Co-operation and Development. Facebook and Instagram are the most popular channels for buying fakes: A survey last year of shoppers in 17 countries found that 68% of other people who bought a counterfeit on social media did so on Facebook. Meta, Facebook’s parent company, did not respond to requests for comment.

Chinese sites, along with influencers, seem to be developing rapidly. At a hearing this month before the U. S. -China Economic and Security Review Board, a federal framework that reviews industry with China, Shapiro said Red Points detected a 26% increase. among Chinese traders in 2023 compared to last year.

To get a sense of how influencers are tricking consumers in the U. S. and Europe into buying fakes directly from China, a hypothetical pair of counterfeit shoes from designer Rick Owens, which typically charge upwards of $1,000.

When an influencer notices that a specific Rick Owens shoe is going viral on TikTok or other platforms, they can look for fakes on sites known as shipping agent services, one of the most popular being Pandabuy. They will offer a portal to the dynamic and chaotic global Chinese e-commerce markets, regularly available only to Chinese consumers. One of the most prominent is Taobao, an Alibaba-owned app whose eccentric catalog has become so infamous that an entire magazine has been created to chronicle its “weird and glorious belly. “

Pandabuy obtains millions of product listings from Taobao and other Chinese marketplaces, translates them into English, and delivers them to a foreign audience. Data from market research firm Similarweb shows that Pandabuy’s online page was visited more than 17 million times in January. The site allows content creators to sign up with one of their partner marketing partners, which means they can earn money by referring their friends and fans to make purchases. The show’s most prestigious influencers have access to an invite-only Telegram channel, where Pandabuy informs about upcoming sales events. and tips for polishing your content.

Influencers scour classified ads on transportation agents’ internet sites to locate quality knockoffs. Once they identify a winner, such as a pair of fake $73 Rick Owens shoes that even an expert might have a hard time detecting as fake, an influencer will search for Pandabuy’s directory percentage for their exclusive associate link. Many create detailed, color-coded, pre-sorted ad sheets of their favorite placements, organized by product category, brand, and color. Every time someone clicks through and buys the item, the influencer receives a relief in fees. charged through the agent service.

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In December, Pandabuy announced on its official Discord server that more than 15,000 influencers had joined its partner marketing program last year, thanking them for their “dedicated efforts” with two emojis of Pepe the frog clutching a red heart. That’s a small number compared to Amazon’s roughly 900,000 subsidiaries, but the counterfeit industry is illegal.

If a user clicks on an influencer’s partner link and buys the reproduction of Rick Owens’ shoes on Pandabuy, the company buys them through the original Taobao listing. Once Pandabuy receives the shoes at its warehouses in China, it takes pictures and sends them to the visitor so they can see what they are receiving. If they are satisfied, Pandabuy sends the fakes to the buyer, and if they are not, the order can be returned or exchanged. Buyers can decide on the carrier they like and even specify if they need the packaging. and “designer” labels will remain attached.

Influencers advise their fans on the process and add how to claim packages that are confiscated from them at U. S. customs. The U. S. or the EU. Many propose that Pandabuy throw away shoeboxes to reduce the weight of their orders and reduce shipping costs. They even let their fans know about upcoming vacations in China that may lead to unforeseen delays. “Remember, we stick to Chinese standards,” says one influencer in a TikTok video. “We rely on their timeline. “

Yaya, Pandapurchase’s visitor service representative, told WIRED that the company only serves as an intermediary and is not to blame for what buyers buy in Chinese markets. “The procedure is quite simple. We ask the dealer for what the visitor is asking for. “she says.

Buyers who find it intimidating to use a shipping agent can turn to DHgate, a 20-year-old e-commerce marketplace that is one of the most established suppliers of counterfeit goods in China. Unlike Taobao, it caters to foreign consumers and can ship orders directly. to your doorstep. Its name comes from the city of Dunhuang in northwestern China, which was once a vital obstacle on the ancient Silk Road.

In 2020, DHgate introduced an internal marketing program for associates, and soon more influencers on TikTok and Facebook began recommending products from the site, adding counterfeit Golden Goose shoes and counterfeit Van Cleef jewelry.

DHgate competes with smaller sites like DesignByRo, which recently introduced a paid ad crusade on TikTok just weeks after the video platform announced it would use Europe’s largest luxury logo to fight counterfeits. “If you’re thinking of buying a fake designer, at least get ‘The Most Genuine Fake Designer,'” said a voice in an ad as someone unpacked a fake edition of a Goyard bag that was selling for more than $1,500.

A New York woman named Cherrie, who asked to use only her first call for privacy reasons, said she bought several “replicas” of designer handbags through an Instagram page. After sending a message to his account, he connected via WhatsApp to a store. in Asia, who sent photographs of the bags for inspection before they were sent to her in the United States. “In the end, the page closed, but then it would reappear,” Cherrie says.

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Counterfeit merchants also get a prominent position on Google’s search engine. A search for “Chanel bag” earlier this month using Chrome browser’s incognito mode first turned up an online page touting a $95 reproduction of a handbag. The site has masqueraded as a small company that makes scented candles, a tactic Shapiro says is becoming increasingly common. “When you click on it on your desktop, it’s an innocent online page for flowers or silk plants,” he says. “You click on that same URL on your mobile device and you’re taken to an online page full of fakes. “

Google says it removed the site and other counterfeit distributors from its search effects after being alerted through WIRED. “We prohibit the sale or promotion of counterfeit products on our Shopping and Ads platforms,” Google spokeswoman Molly Shaheen said in a statement. We routinely remove product listings and take action against merchants when they violate trademark rights. “

Tech platforms still have no choice to continue playing games with counterfeit traffickers in China. Although Chinese courts have had to deal with many more intellectual asset cases in recent years, it is unlikely that most small and medium-sized counterfeit traffickers will ever be arrested. However, influencers living in the U. S. face potential legal risks.

In its lawsuit against the sneaker influencer, Nike accused Fox of being “the leader of an organized counterfeit trafficking community,” according to court documents. Fox denied many of the claims in a filing earlier this month. But he admitted to making a YouTube video in which he tells his followers, “I’m here for you, little guy, get your stuff from China to your doorstep right now. “

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