On 19 Mar 2014, just 4 days after World Consumer Rights Day, China’s government run TV media channel CCTV reported that some cosmetics products sold on both DangDang and Amazon China are under suspicion of being fakes.
According to CCTV’s program “Economic 30 Minutes” aired on Mar, DangDang, the first Chinese website listed in USA that purely operates online, has failed to maintain a strict standard in selecting third-party sellers. In one instance a “biotherm” product purchased from a DangDang seller was out of date according to its production code. To compound the situation the lot number printed on the outer packing corresponded to another product according to a query made using the CFDA’s online platform. In-depth investigation has revealed that some supplies of cosmetics from third-party sellers are stocked from a wholesale market in Beijing where both fake goods and smuggled goods can be easily attained. For these products the inventory certificates cannot be provided by any party and are always missing in the Chinese labels.
In terms of Regulations for the Implementation of the Law of the People's Republic of China on Import and Export Commodity Inspection, Chinese labels with specific product name, ingredients and manufacturers, etc. shall be attached to all products imported to China. Counterfeit issues aside, for this reason alone some of DangDang’s products would fail to comply with national regulations and is contrary to the website’s disclaimer guaranteeing authenticity and usage of validated supply channels.
A similar case occurred with Amazon China, another ecommerce site claiming to sell genuine discounted licensed cosmetics. Estee Lauder and L’Oreal Paris products bought on Amazon China were identified as counterfeits by representatives from these companies. The authentication reports were issued by the two companies at the request of CCTV. CIQs and professional testing organizations can only conduct qualification tests upon ingredients rather than the authenticity of cosmetics products, leaving loopholes that crooked sellers can easily exploit.
Online shopping is fast becoming the most favored shopping method amongst Chinese consumers primarily due to the convenience and fair prices it usually assures. However, the problems raised by fake cosmetics should prompt policy makers to take a serious look at the current regulatory and supervisory practices policing this industry. Regulations specifically dealing with online cosmetics sales channels are poorly represented in the overall cosmetics regulatory framework despite china having a consumer base of some 300 million internet shoppers. Since last year the overarching regulation of cosmetics in China, namely “Regulations Concerning the Hygiene Supervision over Cosmetics” has been under revision. This recent news on the extent of online sale of counterfeit cosmetics should be a major motivation for policymakers to include more provisions regulating online cosmetics sales channels.
We provide full-scale global cosmetic market entry services (including cosmetic registering & filing, regulatory consultation, customized training, market research, branding strategy). Please contact us to discuss how we can help you by 
