---
title: "Multiple Taobao Store Owners Flee, Taking Tens of Millions!"
description: "Multiple top Taobao stores in Guangzhou's Shahe clothing market have shut down and owners fled, owing suppliers millions. The crackdown on counterfeit goods by Taobao has intensified, leading to a chain reaction of store closures and unpaid debts."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-11-19"
language: "en"
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# Multiple Taobao Store Owners Flee, Taking Tens of Millions!

> Multiple top Taobao stores in Guangzhou's Shahe clothing market have shut down and owners fled, owing suppliers millions. The crackdown on counterfeit goods by Taobao has intensified, leading to a chain reaction of store closures and unpaid debts.

**Compiled by: Lingnan Club (lingnanchuangye)**
**Sources: Paipai.com, Retail Channel Observer**
**"They pushed me to the brink! I never owed you anything. I was forced to leave, forced!"**
In the early hours of this year's Singles' Day, Taobao merchant "Spicy Little Black Powder" took down all products and fled. This was the final outburst from boss Wu Jianguo before he disappeared.
**(Guangzhou Apparel Industry Information Network)**
This follows the recent flight of several gold crown stores in Guangzhou's Shahe district, including "Qigege Women's Clothing Store." Another Taobao store with daily sales of 20,000 items has now fled, and the total claims against "Spicy Little Black Powder" have exceeded 10 million yuan!
And this trend seems to be intensifying, signaling a storm is brewing!
The incident began on the evening of November 6th, when the Guangzhou Shahe clothing market was in an uproar.
**(Image unrelated)**
News of "Qigege Women's Clothing Store" spread like wildfire among the stalls.
All products were taken down, owner Huang Wei was unreachable, and 118 suppliers were left with unpaid debts, the highest single amount reaching 400,000 yuan.
Within three days, several gold crown stores fled one after another, including "Laka Xiaoniu," "Modern Era," and "e+ Fashion," with the lowest amount taken being 2 million yuan.
These Taobao stores had been operating since 2013 or even earlier. What terrible reason drove these large Taobao stores to simply run away?
**Taobao's Heavy Hammer: Store Bans**
An anonymous Shahe boss told our reporter that "Qigege Women's Clothing Store" fled because of the high return/exchange rate in Shahe, with dozens of items from major stores being randomly inspected.
Taobao's product inspections this time are vastly different from before. They changed from single-product checks to full-store checks, and if the violation is serious, a single deduction can reach 48 points, leading to immediate store closure.
**Despair drove them to a point of no return.**
Since 2017, daily chats in many stall groups have included the topic "who got caught," with someone in hundreds-strong groups being caught every couple of days. Stores found selling counterfeit goods would be closed by Taobao, and owners could only accept their fate and reopen, which was a heavy blow to a store with existing traffic. But fortunately, to make a comeback, they needed suppliers, and they dared not delay paying debts incurred before closure.
But what stall owners didn't expect was that the "anti-counterfeit storm" before this year's Singles' Day would hit them too. Taobao changed its rules, shifting from single-product checks to full-store checks. The first product would be taken down, the second would incur point deductions, until 48 points were reached and the store was closed. **Large stores relying on Shahe clothing typically have over 1,000 products, so once a full-store check begins, closure is almost inevitable.**
Under this severe situation, loopholes in the supply-demand relationship were exploited. When expected continuous profits couldn't cover risk costs, Huang Wei became the first to exploit a small gap.
Huang Wei's "Qigege Women's Clothing Store" was registered under the identity of Huang Huiyong, but the Alipay account used to pay Shahe suppliers was under the name Huang Haibing. Before the crackdown, the store's sales rankings were in the tens of thousands, but before the incident, they had dropped to thousands, with most popular items already removed by Taobao. **To clear stock, Huang Wei slashed already low prices to below wholesale, and after raising some funds, he vanished along with "Qigege Women's Clothing Store."**
**One Wave After Another**
If it had ended there, it would just be an e-commerce flight case, but the impact goes far beyond what we see on the surface.
Guangdong's Shahe clothing wholesale market is Guangzhou's second-largest clothing wholesale hub, mainly dealing in mid-to-low-end apparel. **In Shahe, most coats, sweaters, pants, and skirts wholesale for under 30 yuan each, and summer T-shirts can be as low as 6-7 yuan each.** A few cotton-padded jackets or windbreakers with more material can reach over 50 yuan. Local factories make hang tags that can be customized with any brand and price, averaging 0.3 yuan each. But most Shahe suppliers don't use hang tags, not only to save 0.3 yuan but also because for a Taobao store, the cost of selling counterfeit goods is much higher than selling low-quality goods, and buyers of clothing at this price point don't expect any brand.
There are experts in every field. A store once bought a coat for 30 yuan, put a brand label on it, and sold it for over 200 yuan with good sales, becoming a legend in the Shahe stall circle. Occasionally, merchants would sell off-season or overstocked items at extremely low prices, sometimes by weight, and there were even deals like 1 yuan per T-shirt without style selection. This shows the quality of Shahe clothing.
Therefore, the key to success in Shahe is the ability to grab new styles first; whoever launches new styles first makes money.
To "grab styles," constant new launches put a strain on large stores' finances, so they used their massive sales volume as a credit endorsement to shift the financial pressure onto suppliers. This is how all large Shahe stores operate.
**Payment terms are at least one month, owing tens of thousands to one stall, hundreds of thousands to another, accumulating to over ten million in debt.**
Once a store is closed for selling counterfeit goods, funds in Taobao are immediately frozen. Large stores can't pay and flee, stalls can't collect and can't settle with factories, and factories can't pay their workers.
With the New Year approaching, debts are being called in, and any slight mishap could trigger a chain reaction, leading to the downfall of the entire Shahe market!
**(Image unrelated)**
It's reported that stalls in Shahe no longer offer credit, and large stores are cash-strapped. At the slightest sign of trouble, **stall owners will surround the large store owners and demand immediate payment.**
The boss of "Spicy Little Black Powder" mentioned at the beginning was driven away by this atmosphere of being besieged on all sides. Fleeing meant death, and staying meant death too.
**Who Moved Alibaba's Cheese?**
From 12-13, you opened a Tmall store, but he sold cheaper than you;
From 13-15, you faked orders and used Zhitongche, but he sold cheaper than you;
In 16, you used black hat SEO, but he sold cheaper than you;
In 17, you did content, live streaming, and private domain traffic, but he still sold cheaper than you.
No matter how Taobao or Tmall changes, as long as he sells cheap enough, he gets massive traffic. That's the Shahe Taobao store, a huge bug.
Before this year's Singles' Day sales began, Shahe already had a large number of counterfeit pre-sale items at low prices. These practices by Shahe merchants over the years may have crossed Alibaba's bottom line. Alibaba has tolerated it many times. According to a Shahe boss, "Taobao has given many chances, including this time, and many stores have been unbanned."
In today's consumption upgrade, Alibaba is making frequent moves, investing heavily to upgrade Taobao, with live streaming, content, and Weitao all achieving phased success.
**But to continue promoting this, Shahe Taobao stores are a major obstacle. Low prices, disregard for copyright, mismatched goods, and poor quality are a big blow to Taobao's brand.**
As Taobao and Tmall internationalize, they face supervision from both domestic and international bodies. The U.S. Trade Representative's Office has listed Taobao on its "Notorious Markets" list.
In 2015, when the SAIC released its white paper, Alibaba's stock dropped 4.36% within 24 hours, erasing nearly 68.7 billion yuan in market value.
In 2016, Liu Qiangdong said in a Wall Street Journal interview, "Actually, managing counterfeit goods online is very easy. A programmer could do it in a day. If you have interests in counterfeit goods, then they can never be managed well. If counterfeit goods truly harm your interests, they are easy to deal with."
Alibaba may feel unprecedented pressure, and solving the counterfeit problem is urgent.
**Finally, Alibaba made up its mind!** Data shows that Alibaba established a 2,000-person anti-counterfeit team, investing over 1 billion yuan annually. In 2016, it identified 4,495 leads of counterfeit production and sales with sales exceeding the 50,000 yuan threshold for criminal prosecution. In March this year, Alibaba called on society to "fight counterfeits like drunk driving," proposing stronger laws, harsher penalties, and a corporate credit system to reduce fakes, which quickly sparked heated discussion and praise.
Jack Ma, who posts on Weibo only a few times a month, published a long post titled "To NPC and CPPCC Members: Fight Counterfeits Like Drunk Driving," which received 100,000 likes within hours.
On September 29th, Taobao announced adjustments to the "Taobao Rules" regarding improper descriptions, signaling its determination to control stores that use low prices to create explosive sales.
**Better Days Ahead for Good Merchants**
Even though Alibaba's anti-counterfeit efforts are mainly for its own market value and reputation, they also clear the way for good merchants who study users and products and optimize supply chains.
In a market that exploits loopholes for traffic, there is only unfairness and vicious competition. The Shahe incident is the bitter fruit they sowed themselves.
But it's undeniable that they played an important role in Taobao's early development. However, amid economic imbalance, they fought desperately to hold their position, becoming increasingly frenzied, and the stalls and even the factories behind them followed suit.
In today's consumption upgrade, everything is upgrading. Maybe it's not you who are wrong, but the era you belong to has changed. This year's Singles' Day, the ninth, marked the end of Shahe's frenzied insatiability on this special day!
As of press time, a tipster told Paipai Xiaomi that Shahe has stabilized. Stall owners who don't want a deadlock are willing to support the indebted merchants once more, as long as the people and stores are there, the money can be recovered.
Finally, allow me to quote a Shahe boss as a closing remark: **"As a Shahe native, I hate Shahe, but I also thank Shahe. In the end, I hope it gets better and better, and good merchants will have better days too."**
-END-


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