Taobao are doing their part to legitimize ecommerce in China, but the industry remains something of a wild frontier. Chinese consumers lost $4.7 billion (RMB 30 billion) to fraud from June 2011 to June 2012, a new report claims.
The China Electronic Commerce Association
has found that 32 percent of the estimated 194 million ecommerce-savvy
Chinese Internet users purchased from fraudulent websites during the
period, as reported by Xinhua (translation). A conservative estimate put losses at RMB 30.8 billion.
Though the government is taking steps to combat rampant ecommerce
fraud, industry insiders claimed the problem continues to grow over
time. Even so, a growing number of Chinese citizens put their faith in
buying over the Internet. The number of online shoppers has increased by
33 million since the 2010-2011 period.
70 percent of the more than 60 million deceived customers over the
past year spent between $79-314 (RMB 500-2000) on their transactions,
the report said.
The tricks used by scammers include basing a fake site on a template
from a genuine vendor and then SEO-optimizing the counterfeit business.
Fake sites are also known to have very similar URLs to the real brands
and sellers. Many sites also have hundreds of bogus reviews for their
products and services.
According to one police officer, fraud has jumped up significantly
since 2010. Criminals employ advanced masking techniques that make it
hard for law enforcement officials to track them.
Crooks and business are continually working to outsmart each other. Taobao, the Chinese equivalent to eBay, recently stepped up its security efforts with revamped mobile and desktop safeguard software.
The stakes of the ecommerce market should only continue to rise. A
burgeoning middle class in China that can afford not just to go online
but to shop there is expected to make the country the world’s largest
e-commerce market in just a few years. One analysis from earlier this year said the size of the market will top $360 billion by the end of 2015.
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