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Chinese online marketplace PandaBuy, notorious for selling counterfeit products, is in dire straits after a recent lawsuit filed by brand owners led to a police investigation and a partial shut-down.
Brands no longer put up with it
No fewer than sixteen brand owners have taken legal action against PandaBuy, saying that PandaBuy provides a platform for selling counterfeit products from well-known brands such as Nike and Apple. Which specific brands filed the lawsuit has not been disclosed, but the seriousness of the case is evident from the scale of the police action. Chinese police have conducted raids on warehouses and PandaBuy’s headquarters in Hangzhou, and a network of merchants affiliated with the website is being closely investigated.
Besides the legal problems, PandaBuy is also facing operational challenges. Not only was the company hit by a cyber attack in which data of over 1.3 million customers was leaked, but since then there have been outages on the website and certain functions have not been working. However, the company states that the service disruption is due to the ongoing police investigation, and not to the cyber attack.
There is now a lot of anxiety among users: not only do they fear that their orders will no longer be delivered, but many also fear being prosecuted for buying and selling counterfeit goods. PandaBuy allows Western consumers to order directly from Chinese factories, with the website acting as an intermediary. It collects and ships the orders, allowing users to choose through which countries the transport is done. Tips are exchanged on various forums about how packages (which sizes and via which countries) can most easily slip past customs undetected.
Brands and retailers worldwide follow the police investigation and the court case closely, as it is an important signal in the fight against Chinese counterfeiting. It is possible that the case could set a precedent for dealing with other platforms involved in the sale of counterfeit goods.
