Targeting fake goods for profits
An industry built over 20 years focuses on making producers pay for counterfeiting
Wang Hai shies away from family gatherings, wears sunglasses as often as possible, and avoids appearing in front of cameras.
The 42-year-old consumer activist is well aware of the risks involved with his trade — purchasing brand name products he knows to be counterfeit then going after the manufacturers to seek financial compensation. He also helps companies pick on their competitors.
“This is all about risk management. The more companies I target, the more risks I am faced with. I need to minimize the risks to me and my family,” he said.
Wang currently has four companies based in Beijing, Tianjin, Nanjing and Shenzhen, all of which specialize in turning a profit through compensation from counterfeit product producers.
His company also buys and tests products, and matches product details with advertisements to find discrepancies.
In 2014, his four companies spent 2.02 million yuan ($317,800) to purchase 1,444 batches of fake goods, and with that made a profit of more than 4 million yuan.
The fight against counterfeit products “has nothing to do with justice. It is a noble act only because you can make money. The more money you can, the better job you are doing,” he said.
“I like targeting big compa- nies because they can be more deceitful to the consumers, and the harm of their counterfeiting behaviors could be more far-reaching,” Wang said.
A native of Qingdao, Shandong province, Wang started his professional career against counterfeit products in March 1995, when he sought to purchase two headsets at a shopping mall in Beijing before he realized they were counterfeits.
He went on to purchase another 10 headsets, and later tried to get double what he paid from the shopping mall under the consumer rights protection law.
“I am the sort of person who always wants to see things through. The process is filled with challenges, and I enjoy those challenges,” he said.
Wang’s profit-driven motives have long been con- troversial and critics have accused him of choosing targets that provide big revenue potential while deliberately ignoring small counterfeiters.
In 2009, an online post in the Tianya Club forum accused him of blackmailing major industry brands. Wang file a libel lawsuit against the forum in the Beijing Chaoyang court, but the court rejected his claim, ruling the post was removed in a timely manner, the Beijing-based Legal Mirror newspaper reported.
Wang has lost at least a dozen lawsuits over the years, including some filed against industry giants P&G, Coca Cola and China Mobile.
After two decades, he said there has been barely any improvement in the country’s consumer rights protection.
“Consumer rights groups still barely make their voices heard,” he said. “Trade unions representing the interests of companies are drafting laws and regulations that ignore consumer rights.”
Meanwhile, there are few independent agencies that test products and can present objective and impartial test results for consumer goods, he said.
“It is increasingly difficult to get the products tested by third-party agencies. Many agencies are bankrolled by companies and present fake test reports for them,” he said.
Two decades later, Wang is not the only one in the game. There are now hundreds of other companies doing the same, trying to make a profit through the purchase of counterfeit products. But Wang said he has never felt the pressures of competition.
“It is a good thing. They are virtually supervisors of consumer rights for free. They can spur the enterprise to expand their business through innovation, rather than unfair competition,” he said.
China’s legislators have stepped up efforts to protect consumer rights, including a newly amended consumer rights protection law and advertisement law.
Wu Jingming, an associate professor of consumer rights law at China University of Political Science and Law, said the establishment of a nongovernmental consumer rights group in China remained a remote possibility.
Wu said there is still much to do legislatively and in law enforcement procedures to crack down on counterfeit products. The gaps in the law have enabled individuals such as Wang to flourish.
“Their actions are protected by the law as long as they are not violating the law,” he said.
Wang Hai,