The Office of the United States Trade Representative (USTR) released on Thursday its latest review of the 2021 “Notorious” Piracy Markets List including online and physical markets for offering fake and pirated goods, with the presence of the two giants AliExpress and WeChat for the first time.
The USTR office referred to them as “two significant China-based online markets that reportedly facilitate substantial trademark counterfeiting.”
The USTR’s report informed that global counterfeiting costs the U.S. economy some US$29.2 billion annually, and China is the world’s largest producer of fake goods.
USTR Ambassador Katherine Tai stated that illicit trade increased the vulnerability of workers involved in the manufacturing of counterfeit goods to exploitative labor practices, and the counterfeit goods could pose significant risks to the health and safety of consumers and workers around the world. She also said, “The global trade in counterfeit and pirated goods undermines critical U.S. innovation and creativity and harms American workers.”
WeChat’s China-Facebook version (WeChat, Weixin) is one of China’s largest platforms, with more than 1.2 billion active users worldwide by 2021. AliExpress is a unit of Alibaba Group, which owns the Hong Kong media South China Morning Post and is known for having some of the best anti-counterfeiting processes and systems in the e-commerce industry, according to USTR.
Apart from AliExpress and WeChat, several Chinese e-commerce service providers such as Alibaba’s Taobao, Baidu Inc. cloud-storage service Baidu Wangpan and DHgate.com Inc. have been “notorious” markets for a long time also hold their positions on the 2021 list. Pinduoduo, one of China’s largest online retailers, has remained on the list since its first listing in 2019.
Besides online providers, nine Chinese brick-and-mortar marketplaces that manufacture, distribute, and sell counterfeit goods were also reported.
According to the USTR’s report, China ranks first as the largest source of counterfeit goods seized by U.S. Customs and Border Protection (CBP). Furthermore, China’s number of products manufactured by forced labor, including state-sponsored forced labor, is also the highest.
The report informed that US CBP’s seizures of China’s counterfeit and pirated goods in 2020 showed that those goods directly from China or shipped through Hong Kong account for 79 percent of all counterfeit goods seized at the U.S. border by volume and 83 percent by value.
It’s revealed in the report that online counterfeit sales had resulted in declining online traffic. In response, these counterfeit goods’ sellers often use their physical storefronts as a contact point to gain online customers’ trust.
The report concluded that the major markets remained the main hubs of notorious counterfeit sales in China’s major cities.
According to the Chinese-language media Da Ji Yuan, although raids and seizures of these markets have occurred in some locations, sellers have changed their strategies, such as reducing on-site inventory and offering more counterfeit products online.
The annual review of the 2021 Notorious Markets identifies 42 online and 35 physical marketplaces that engage in or contribute to significant trademark counterfeiting or copyright piracy.