Chinese authorities have busted a ring that counterfeited high-end cosmetic brands, netting 4,000 fake products valued at over RMB20 million ($2.9 million).
Acting on information provided by Alibaba, Nanjing police recently raided a warehouse and arrested four people on suspicion of illegal activity. They’re seeking six others suspected of being involved in the alleged counterfeiting operation.
Alibaba first tipped authorities off to possible counterfeiting of high-end skincare products by one online store in October 2016. The company’s platform governance team subsequently used big data to unveil a web that knocked off La Mer, Jo Malone, CK, SK-II and other premium cosmetic brands across China’s Jiangsu and Zhejiang provinces.
Authorities raiding the Nanjing warehouse found creams and serums being made and packaged in unhygienic conditions. Some products were complete fakes, from contents to packaging. Others were put into original, recycled packaging and passed off as authentic.
The warehouse raid was the culmination of the latest cooperation between Alibaba and Chinese authorities to weed out not just sellers of fake products, but also to use big data to trace production back to its source and bring it to a halt. Last year, “Operation Cloud Sword” bagged 332 suspects operating 417 suspected counterfeiting facilities and seized fake goods worth RMB1.43 billion ($207 million).
In addition, Alibaba earlier this year launched its Alibaba Big Data Anti-Counterfeiting Alliance with 20 brands, including Louis Vuitton, Mars and others, to use industry and technology to bring down makers and sellers of fakes on its platforms.
The group has called for tougher laws and penalties on fakes and fakers. In the meantime, Alibaba has also sued people suspected of making and selling counterfeit products, saying it hopes high civil penalties will act as a deterrent to those who choose to knock off brands and products.