As Western companies increasingly seek to sell to Chinese online shoppers, often via the massive web shopping portals that account for most e-retail sales in China, they are encountering instances of products marked as theirs for sale on those marketplaces that are not genuine or are being offered by merchants not authorized to sell those items in China.
In the latest example, ExxonMobil’s Chinese subsidiary ExxonMobil (China) Investment Co. reported recently finding counterfeit products on the e-commerce site of JD.com, Inc., one of China’s leading e-commerce companies. In a statement the U.S. oil giant says it purchased a product marked as “Mobil1 5W-30 dexos 4L” engine oil on JD.com, but found through lab tests that the product was not made by ExxonMobil.
JD.com quickly responded that the dubious product was not sold by JD.com itself, but by an outside merchant that sells on JD.com’s marketplace. JD.com says it has taken that product off the site and will punish the merchant if its investigation proves the merchant did something wrong.
“Before merchants start to sell on JD.com, we strictly scrutinize their licenses and make sure they have the right to sell the products, but it is impossible for us to check the quality for every item,” JD.com says in a statement.
JD.com is No. 1 on the Internet Retailer China 500 guide, as it is the leading retailer in terms of its own sales to Chinese consumer. It is also the leading competitor to Alibaba Group Holding Ltd., whose online marketplaces account for some 80% of Chinese e-retail sales. Alibaba is preparing to go public on the New York Stock Exchange this year.
JD.com, which originally sold only its own merchandise, has reported that its marketplace business made a profit in 2013 and has become an important driver of growth. In 2013, total sales on JD.com reached 125.5 billion yuan ($20.7 billion) and marketplace sellers accounted for 33% of those sales.Favorite