This is a guest post by Echo Hu is a Chinese-language copywriter and social media marketer at Nanjing Marketing Group. She regularly posts on East-West-Connect.com, a blog about Internet marketing in China.
On December 1st, Gaopeng—a joint venture between Groupon and Tencent—finally made a formal apology for the ‘fake Tissot incident’, over a month after their initial denial. They offered a full refund to everybody that bought a fake Tissot watch from Groupon China as well as give an additional 200 yuan in credit. They could have fixed this problem over a month ago, but instead chose to deny it first, only to be pushed to finally accept it in the end. What took them so long? Let’s take a quick look at Gaopeng’s recent Tissot problem.
In addition to reflecting poorly upon Gaopeng, the incident has further shaken trust in China’s embattled group-buying market.
Oct 19: Gaopeng Denies Selling Fake Tissot Watches
On October 19th, Gaopeng’s daily deal was 690 Yuan for a PRC200 Tissot watch that normally sells for 3,500 Yuan. Over 1,600 people bought it.
After receiving their watches, many of the buyers noticed that the packaging didn’t seem right and there weren’t any accompanying documents of authenticity. They approached Tissot to see if the watches were genuine Tissot products or not. Tissot confirmed that they were indeed counterfeit! The customers complained to Gaopeng, but Gaopeng wouldn’t admit any wrongdoing or even that there was a problem. Instead, Gaopeng asked for evidence. This was Gaopeng’s first response – Denial.
The Tissot Deal on Oct 19.
Nov 3: Gaopeng Agrees to Give Refunds, but Only Privately
Two weeks later, Gaopeng agreed to give all buyers full refunds. However, the buyers found that records of their purchases had been erased from their Gaopeng accounts. This was Gaopeng’s second response – “Refund, but destroy all evidence.” Gaopeng did not want the news to spread too widely.
Nov 5: Tissot Takes The Dispute Public
Tissot publicly announced via their Weibo microblog that they had confirmed that Gaopeng had sold fake Tissot watches. Now there was no way to deny it, it was public knowledge that Gaopeng really had sold fake Tissot watches. To assuage the doubts of Tissot’s customers in China, Tissot created a support email address to help others determine if their Tissot watch was genuine or not. At this point, Gaopeng still wouldn’t give a formal explanation.
Nov 5: Tissot’s posts on Sina Weibo, stating they had notified the authorities
Dec 1: Gaopeng Admits to Selling Fake Tissot Watches and Gives Refunds
Over a month after the initial incident, Gaopeng finally made a formal apology. They stated that they were also victims in this incident as they did not know that the Tianjian-based trading company that was selling the watches was actually selling fakes. Gaopeng apologized to the buyers and gave them all a 200 Yuan credit. This was Gaopeng’s third and final response – ‘Acknowledgement’.
Gaopeng finally got it right, but it took them much too long. Trust in Gaopeng, and group-buying in general, was shaken.
Can Group-buying Websites be Trusted?
After the Gaopeng/Tissot incident, trust in Chinese group-buying websites has dropped sharply. Customers now have to ask themselves: Is a deal on a group-buying site really a great product at a low price or is it just a shoddy fake product again?
China now has more group-buying websites than I can even count. They’ve been seeing rapid growth along with the growth of Chinese e-commerce in general. Customers view them as a way to get great deals. Businesses view them as an effective way to promote their brand and sell large quantities in a short time.
Chinese consumers are now turning to social media and niche forums to help protect themselves. The group-buying forum Tuan800 is one such niche forum. It acts as a platform for consumers to voice their grievances with group-buying websites. So far they’ve had over 11,000 complaints about group-buying websites, over 6,000 of which are reported as being resolved.
Dec 2: Gaopeng Dives Back in to the Watch Business
Aiming to win back the confidence from China’s watch buyers, Gaopeng offered an extremely attractive Sea-gull watch deal in an attempt to draw back as many watch buyers as possible. The deal was for a 33,000 Sea-gull watch for just 699 Yuan! Gaopeng China’s COO, Ouyang Yun, stated that they did this intentionally, to “stand up from where they fell.” Looks like they’re back on their feet, because there were over 1200 purchasers for this deal. However, note that that is still about 400 fewer purchasers than for the Tissot deal, despite the massive discount.The vice-president of Sea-gull, Ying Li, said that the fake Tissot incident hasn’t shaken his faith in Group-buying platforms because they can still sell as many watches in one day as they can sell in a physical store in a whole week. (Video here, Chinese)
Gaopeng’s Sea-gull watch deal on Dec 2.
What Does All This Mean?
This incident has further pushed Chinese Internet users to learn to protect themselves. Although hurt, Gaopeng will be fine, so long as they don’t make a mistake like this again. The group-buying industry as a whole will survive this little hiccup almost as if nothing happened. E-commerce is becoming too ingrained in the minds of Chinese consumers for them to be scared off of online purchases by one event, or even several scary events.
What has changed, and continues to change, is Chinese Internet users’ resourcefulness. The principle of consumer rights is growing stronger and stronger in the minds of Chinese consumers. They now use social media, legal methods and forums to protect themselves against fraudulent group-buying websites. This trend will continue.
What does it mean for businesses? As I see it, there are opportunities to build trustable brands, as well as to build real, trusted third-party validation platforms. Chinese users may be willing to trusting e-commerce and group-buying as a whole, but the businesses that lose consumer trust, and fail to take the appropriate measure to earn that trust back, will end up dying off.
But that’s just my opinion, what do you think?
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Caron Smith
