Many Western brands are discovering their products are available on Chinese eCommerce platforms—even without their direct involvement—creating significant risks around quality control, market disruption, and IP protection. Want to learn more about protecting your brand in China? Keep an eye out for our upcoming white paper, and let us know in the comments: have you spotted your products being sold in unexpected places across Chinese marketplaces? #econtrol #vorys #ecommerce #china #cbec #imports
Attorney | Partner | eCommerce, Anti-Counterfeiting & Supply Chain Security | Data Privacy | Dual-Qualified in China & the U.S.
China eCommerce Insights*: Why Are Your Products Popular in China Without Your Involvement? Many Western consumer brands are making a surprising discovery: their products are widely available and even popular on Chinese eCommerce platforms like Tmall, Taobao, JD, and Pinduoduo - even though the brands themselves don’t sell to China. This phenomenon is driven by unauthorized parallel imports, which fall into three main categories: 1. Unauthorized Traditional Imports 2. Unauthorized Cross-Border E-Commerce (CBEC) 3. "Daigou" – a practice where Chinese individuals purchase goods abroad and resell them in China, often leveraging the price differences and limited access to Western brands. Parallel imports have become increasingly popular among middle-class and affluent Chinese consumers, driven by their strong preference for Western brands. Many discover these brands through social media and the experiences of millions of Chinese living or traveling abroad. However, access to these brands is often limited because they are not officially available in China. Additionally, most Chinese consumers face challenges shopping directly from international retailers, as they often lack English language proficiency or internationally accepted credit cards. While parallel imports may drive sales without requiring direct investment from the brand, the risks are significant: - Quality Issues: Parallel imports often fail to meet the quality control requirements for packaging, shipping, or storage, leading to dissatisfied customers and reputational damage. - Expired Products: Some importers intentionally source near-expired goods to maximize margins, exacerbating consumer trust issues. - Market Disruption: For brands planning to expand in China, parallel imports disrupt go-to-market strategies, undercut pricing, and erode profits for both the brand and authorized distributors. - IP Vulnerability: Parallel imports can open the door to trademark squatters, copycats, and counterfeiters, harming not only Chinese operations but also global markets. Addressing parallel imports is a complex challenge that demands a comprehensive, multi-faceted strategy, including: - Leveraging intellectual property rights - Implementing robust global distribution controls - Proactively monitoring and enforcing compliance My colleague Daren Garcia and I explore these challenges and solutions in detail in our upcoming white paper. The key takeaway: brands must take proactive steps to assert control over their presence and product sales in China. Are you seeing your brand pop up in unexpected places? Leave a comment below or DM me. *China eCommerce Insights is a LinkedIn post series I’m creating to share updates and insights on business, legal, and regulatory developments in the Chinese eCommerce market. Follow me for your weekly updates on China's dynamic eCommerce landscape! #ChinaBusiness #eCommerce #ParallelImports #BrandProtection #Vorys #eControl